Earnings call transcript Q2 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the InfuSystem Holdings, Inc.

Second Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

to conference now Dorame, to like Partner. Managing would turn over the Joe I ahead. go Please

Joe Dorame

June and morning, review the XXXX, results to for InfuSystem's for ended of quarter Good second you financial thank joining XXXX. XX, us today

open us conclusion Chief Officer; DiIorio, remarks, of and Lachance, today's Barry are Operating Chief will Officer; Executive President Financial prepared on and call the Chief Officer. With questions. today Carrie Rich call the for Steele, After we the

may to constitute uncertainties, remind annual prepared forward-looking Form the of risks the under with XX, remarks, contain within Reform the are detailed company like involve that XXXX. Exchange year some for Litigation made InfuSystem the I begin Act ended the report Securities certain and factors we by Securities Except which everyone Commission, would call the management and during Before filed and statements risk statements this including forward-looking with meaning of on of team statements this documents Private fact, by of for conference the XXXX. call of conference statements XX-K December historical the

Forward-looking statements statements give made. statements required law. obligation any the forward-looking assurance except the speak any of statements, can does forward-looking be company as will by and as that such to correct. specifically disclaims date no prove The InfuSystem were undertake only not to update

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

Richard DiIorio

InfuSystem's you quarter for all Joe, today. morning, Thanks, welcome earnings XXXX joining and good Thank call. And second everyone. us to

the delivering be quarter on now for that that XXXX that press two will but coming above the cover the ever exceed in expectations. quarter of prior was XXXX exceeded in meet year our reflects growth a quarter a see in With recently minutes, this we And or out Barry XX% and was morning's the will quarter point few by $XX.X first-half the results those history first year was revenue QX noting completed strong an that million, calls year. at specifics our start I which in million, first I'll quarter, the building million. second year-over-year. execution theme second $XX is where the from numbers going the to of release, this first key $XX

desired strong in Our our and of biomed the and rapidly growth specifically the wound services GE, with the moving rollout is execution master care and of year under the result it's the momentum. first-half the initial businesses, agreement achieved has in

strong of device In of care, with we Cork as pressure another quarter placements negative part saw wound our relationship Medical.

As we as device are Sanara top that only a these prepare establish they also our but to growth be will driver, starting hope we contribute a introduction our reminder, in XXXX. important products for line, to customers the not placements of base

history like to I'd assets Hidden way and underutilized do that team, These biomedical a that oncology had services great the payer a and covering review performance long to InfuSystem Prior strategic XXXX. XXXX an quick we the paved for seeing a in of are as company. decisions pump the of primarily scalable was within contracts, capabilities. and XX% and management that population, capabilities. cycle our collection a strong business revenue include underappreciated of national the U.S.

Services a requiring this most that GE, Cork company; And InfuSystem McKesson, both infusion units, solve we providers, and to we payers. Patient provide pumps and built understand a Starting how patients, manufacturers, and services to Solution. Device we has is of for just is led material a patient and to important around Cardinal, these problems and and opportunities, challenging, do care. looking is to it dedicated oncology business ago, that partnerships difficult business, healthcare the Sanara. culture then a To What long-term recently our opportunities service few and vision our years beyond first grow of expand growth began involving potential emphasize

fruit. business this these when you All to the We initiatives this, thank initiatives when the like and investments is initiatives of to back often some year hard work takes as we as show the require in made the of benefits for or we've between where about waited Master talking attempt several what began begins of effort as we revenue. to that pursuing the from GE, be revenue Services With bearing Often, Agreement. for to become your explain and it XXXX times up. in years big announce the in ramp. transparent work is we all to patients we've initiatives when advance why be beginning would started our In XXXX quarters been to begin the possible. is would prior anticipated 'XX,

and XXXX, continue currently to Sanara. services work that relationship how joint deal a preparation expected the in 'XX. acute Sanara be 'XX, care. and is the especially nature most in will developed addressable we're total that started to and is biggest initiative start revenue 'XX. in joint next The GE venture is 'XX. venture impactful. relationship we and steadily only the working are We working be. in biomedical are but for towards they in the huge, the through signed big on, impactful the The of material we And to are with the projects to market are And The now, not see was necessary allow

therapy. disruptive patients. But was brought can incredible and it products venture. and that and technicians joint involved all Sanara work few And years a will with that early benefit to ago, larger Sanara initial pressure patients that the opportunity the on a negative wound Cardinal than open initiative is country. to led place the only with project that focused a hospitals we model us greatly for Sanara new us The payers GE healing much execute existing our the doors opportunity over on our has and as agreement, in

products Sanara skilled will in our robust together backbone the the nursing payers are I'm that with be and and national a needed long-term logistics RCM long-seen brings report opportunities address schedule. story, on facilities. XXXX that and progress has That care contracts, to to the preparations and happy these partnership remain The capabilities, that

update we this our full-year. for would the to grown margin. XX% like first-half net EBITDA estimating the the guidance. X% at of than to guidance full-year, the I everyone beginning a our growth greater At we pace on of Now, guided the X% XX% rate revenue adjusted year, the of year, Through to for above gave XX%, and revenue

much range of factors, a variety our revenue of on How we previously expect and a taking are to which We of above our depends you updated revenue above come net approach in outside greater some of when our are more the Accordingly, conservative provided. have guidance we raising and have fall, XX%-plus. visibility We and speak again color after we'll full-year the even in to should numbers. results give our growth QX control.

Barry will now the operations then financial additional color involving provide take for quarter, GE will us the on results second Carrie and through and Sanara.

Barry Steele

three the during main our the the everyone clearing joining to towards Thank you, focus forecast XXXX you on identified for quarter's year, the the I'm control internal today. for rest us Rich, results, and drivers thank of call the deficiencies for our the going topics; and audit. current progress on

First, period. results let me touch the on our for financial

with Patient $X.X ramp-up This $XXX,XXX services Device quarter, a revenue growth, segments to quarter, which new which with our segment increase XX.X% when quarter first $X.X during of with the million the the a biomedical the compared for quarter, contributed program from to in was XXXX to second eight the improvement quarter was operating last year. fixed the XXXX while the contract leading year representing $XX.X GE XX%. growth HealthCare, setting in or million, revenue the quarters. record, continued an Solutions, this seventh totaled prior primarily totaling million, revenues revenue the second of was launched. attributed was the Services Both booked delivered only prior and of second $X.X million In Device revenues of XX%, record all-time the way Net rate a the of up increased Solutions

On taper current from which rate first Services of X%. the improvement Most Patient which XXXX. by million. onboarded off equipment the XXXX quarter. the couple pressure the had to no sales We at the negative of The $X.X in annualized $XXX,XXX the stood these sales Services driven million, rest was Patient of almost one in customer, of from was to the pressure increased second nearly continue in in oncology, next This million. and negative amount or improvement revenue Most to channel of we totaled for run quarters. target during expected is on quarter lease, were June and this approximately $X by sales the $XX to our towards triple XX, the devices contract march was

The XXXX year's second this first or was was $X.X the $XXX,XXX, the but prior higher $XX.X of offset profit which quarter, an quarter. which gross XX.X% this up increase the costs XX% for sales, unfavorable first the profit driven the of X%, Gross in was and of mix This down the was million, second by year's and slightly year-over-year but prior startup during of with due by a services from year, was HealthCare quarter. lower gross GE to was product margin quarter XXXX, contract. year's from biomedical changes percentage, from second decrease mainly the mainly higher or quarter than million additional partially XX.X%

about higher to services revenue, average. growth, due estimated the than have The gross most company costs startup the products impact and have second margin are been pressure sales biomedical which the equipment HealthCare quarter. lower mix a XXXX is negative of to for $XXX,XXX GE

on amounts higher it had with is first off amount than planned, started still we amount revenue lower significantly when this the contract. also the of quarter we While we lower than originally during the is

in travel costs productivity as largely initial include fees the lower development recall, for such recruiting field, hiring may bonuses, employee travel expenses training team. acquisitions You and costs, and case, in higher the time, this and startup

original administrative decision our X% reach continue then These for quarters, year. these expenses general, planned to dissipate accelerate prior million, compared the the to upfront XXXX opportunity were onboarding to that than several $XX.X anticipate as will over margin increase will $XXX,XXX or higher expenses We of originally and presented. when once totaled due we estimates full Selling, the process representing the second ramp. the the of approach quarter our an higher-than-planned was to expenses and next

X.X% XX.X% which was a of during ratio, the XXXX, represented was amount XX.X%. which revenue from the decrease However, prior-year

was the first XX% XX.X%. of margin dollar and As slight year, $XXX,XXX, a amount the dollars second XXXX, percentage the X.X%. of but from a to X.X% our impacts, or in decrease increase improved Sequentially, of margin million during the from revenue prior better, a quarter quarter, which $X.X represented adjusted totaling these result of the EBITDA of net $X.X in by

we stated, X% Rich Turning expect our to as growth now the prospects the the outlook rest of revenue to of stated to for XX%. exceed year, previously

expect slightly the we However, a sales. planned contributed originally EBITDA fall negative expectations. improvement that therapy significant faster contract, a revenue to our wound include adjusted in to Important than short and pressure of rate growth GE for equipment amount ramp have factors of

the look a towards the ramp GE lower As therapy anticipate negative wound second-half, shipments but of we equipment. we steady contract, pressure continued for

now second-half to outlook EBITDA level. higher startup to the to anticipate the the exceed is first or quarter. [fell adjusted XX%-plus which original Our due GE XX% be (ph) margin EBITDA expenses, the mainly adjusted expected for in contract the heaviest] meet to We XX%

about applications, of deficiency and accuracy design certain support you me a terms information deficiencies and review They so-called material control our weaknesses, and Report, completeness our of our about I'm annual in over in pricing of to while accounting used revenue the you and our general important some audit When our deficiencies reporting remediating technology by controls access a entity the financial rights management Annual controls over little for let revenue an the filed controls. include IPE, recorded of by established on over categories. update in receivable process. internal tell we produced contract we told more information owners, it, progress and within the and controls accounts at you and bit material of I'll in Finally, three change

an categories, of of result deficiency with aggregate number general control [findings] These individual-specific (ph). a

policies, many these process. and and steps addressed procedures our to underling existing have items We individual and adding by of specific redesigned implementing new

the We many and are the to corrections working have complete remainder. of made necessary

coming validate to need new a intended, will are process months. review still we as performing weeks which is we the be and addition, that the testing in and that In operating activities

anticipate the progress, be year. our Given weaknesses will December material XX mitigated current we completely continue that of by to this

registered announced quarter tell The Deloitte update annual are our completely the the we working review process I to public before annual Deloitte about complete audit. has recently to independent XX-Q and we is as process engaged, the next quarter want second accountant file been for our appointment week. XXXX audit to second of you the

will our Chief is our additional President developments Carrie Operating wound Officer, up, and provide biomedical on Next services care business. in Lachance, some color and who

Carrie Lachance

provide Thanks, current the Barry, like I'd the and the status more and with update Sanara. MSA good details GE, on to rollout morning, under everyone. with the JV of

quarter, devices the number increased MSA of accelerated we onboarding revenue and the During the second $XXX,XXX. under pace the to generating nearly of

will in quarter, process as involve be approximately of of substantially MSA As a the initial will that We mentioned. of devices, initial and for a monthly the will initial onboarded, the reminder, Rich phase each by the fee the end first is recognize life XXX,XXX continue we onboarding the the completed when that fee an pump currently then XXXX, contract. maintenance estimate that and

rollout biomed technicians teams maintenance. strike network teams. onboarding required A will for ongoing are a each annual our return of as preventative responsible and key the part perform as to complement of facility GE well national perform the The to the that maintenance building involves mobile strike process

service hospitals. within much compression are may intention focused our as of levels rapidly devices, scaling clear made services of white-glove MSA, GE types adding the initial still very phase perform and different This capabilities. we the can has delivering own such InfuSystem's additional sequential under While its on leverage devices adding ETCOXs and that the teams include to of

already inventory started. A good project have we is this the RPID example that of

is perform initiatives. for both to out, year to such next Again, As the and under our strategic it's facilities that and work to are reputation national will defer network doing into outside teams and be biomedical can services benefit strike our for will on future the quality leveraged building as our manufacturers and believe for that services built so we GE. MSA, network business opportunities GE delivering focus we superior of

care, wound to backlog was the delivery due resolved of we This quarter Turning chain of the devices experienced has our of partly placements. to had and the at by last supplier, we all Medical, receiving pressure developed end device of year. Cork strong Cork as the are result expected. negative issues, supply another that issues currently

The Genadyne, is been placing going take this strategic allows I'll products device that as of into the care first opportunity vast we we remind majority long-term However, distribute to pressure in everyone as pumps been same supplier, into added second This us it facilities. have Sanara's quarter. negative care facilities. have to advanced wound these

I'm steady payer that, establishing to report to team are in regard our necessary and we With to the implement processes a billing. connections taking lead with happy third-party successfully process making cycle revenue

year. and are efforts end selling We on before and other to schedule, this of testing begin the expect

turn At the this point, like I to to call over would back Rich.

Richard DiIorio

Carrie. Thanks,

strong good XXXX. over help rest of a growth drive revenue halfway The year, we into very to ramp, As and we place. the in is and little rollout this sit today, a through GE continues to are expected XXXX, for

excellent, with initial scope how MSA. and on beyond the GE of there are regular is the Our to discussions relationship expand

service to the expect identifying both next We are and involve aggressive and we inside be the to opportunities network year, outside this leverage of best will GE. building, opportunities national

this rentals, we care. own, and As ready continues year, our I and to consumables surgery. opportunities in make Oncology contributor has are bigger businesses great start contributions strategically should ramp when as emerge contributing and as to and Equipment making are their other continue the been Sanara target important a if sales, holding acute end of before said, steady progress. materially XXXX, paying

the are call. portion begin Q&A of ready to We now the

Operator

O'Neil now first question ahead. session. of Our will Street Go from Lake comes Brooks Markets. [Operator Instructions] the Capital question-and-answer begin We

Aaron Wukmir

morning is everyone. Aaron questions couple on for Wukmir line so, Brooks, good just a the This Hi, of here.

area. You you on the long-term facilities? facilities, just well home care you Do the those care more in those on wondering provide could long-term in mainly mentioned, as in care opportunities are a opportunities focusing guys wound see you if little any the or I'm just color that.

Richard DiIorio

step-downs, little a hospital need it's of a nursing So, go facility, the treated. both. and long-term care whether facility down their gets skilled a patient bit the wounds from it's they When a discharged or

home done we place lot when they the is the care, they a continued of there if products at can go So, care as But facility. need well as that Sanara well.

Aaron Wukmir

first-half quick thanks. on guidance be And whether planning it they any as a XXXX? Okay, revenue you or or then mentioned you ramp are second-half Sanara just have follow-up awesome, so actually, specific you anything were to like that? for -- a in Do

Richard DiIorio

yet. Nothing

But As that in. so yet. yet; some in we towards should building revenue we for we'll year, kick pipeline, for but anything early there we'll specific out it But XXXX built build we to really end. the start the on is that have don't out the probably roll the haven't second-half, team our the already just budget see year in

Aaron Wukmir

Okay, very helpful. (ph). Congrats, guys, [on the print]

Richard DiIorio

Aaron. Thanks,

Operator

question from Our ahead. Nowak comes Go Craig-Hallum Group. next of Alex Capital

Alex Nowak

now great. Okay, now of and deals get staffing normal, how everyone. just [positive] just is I here, much deals a first was gaining and these And strength allowing hopefully in morning, ramped? environment to to QX in secure Good QX, Rich, these back curious, really InfuSystem out get and there (ph)

Richard DiIorio

not hospitals, COVID so to on access it's it will guess I during side partner, I ever normal, on as if our the back But us core viewed any don't businesses, wasn't Yes, where much very In definitely get know having was. to it and more. an not it's terrible. nursing really we're impact even the and a

not that anymore. care there's general, sites, nursing and the national in-service a good businesses, a in to go and new and but, With sure, really sort of But acute in us for back talk products, concern for place get to we to I normal, it's definitely but enough need to the customers, them, wouldn't thing. say access it's

Alex Nowak

to great that's hear. Okay,

it As that the to some fair the business ramps assume the see to leverage, far, you've we're year second-half here, to and going or made you be XXXX? that do of into needed start is to in it investments still of so this whether

Barry Steele

into that said, how could that and contract. more hire the onboarded and where to the and that, some in we'll Yes, on like things there so, probably efficiency to yes, be come can completely just about that's training, down other GE, there's investing out have it'll initial general. people, investments totally tapering we're effort things hone for in be other That With cost the until talking certainly that -- of even up. time we think we're ultimately to that moving GE,

So, we we being that making grow quickly. doing past the part, said, the now, would get would be to But never we're investments things we -- that most say for the business. pretty we'll that

Richard DiIorio

just businesses Alex, team, were so in can the that adding without years amount side, investments to care the pain place and for bit. grow to couple big the a next and sales and a need quite to teams, that, that we in investments Yes, is add because team those already over the the then those fair wound in, the we cost

Alex Nowak

I got And with out there to handful that the in to with names help sense. the biomed of would a ultimately your devices other deals there sense on in make there GE. What the appreciate being makes update Is Okay, it, background? discussed partner market? out are GE-like InfuSystem

Richard DiIorio

their time, this techs get our Yes, of a trying the to just under 'XX. some GE of we gap to hospital to are still get focus feet into taking have us smaller stabilized individual But schedule. that we're we going outside and on stuff base, when have our so just then completely hospitals in year GE on some kind --

hospital going going going help see and right, when we're deals, to I needs come see out, help where them think to a individual out. us We're just to to that hospital out. we manufacturers in we're look

the And capability GE, is logistics of once a there's not but of any that hopefully a there we partner there guys with, the footprint and out standpoint, is out all eminent, name nothing our and couple could above, from the above. but with maybe that, can we like there partner certainly

Alex Nowak

quick. and a unique then it. And pretty the Sanara one I get then more, to up is guidance got building just want obviously portfolio. wound real Okay,

is that source integral InfuSystem could provide service at of looking setup? provide services how sole I you're the that there? Just sort provide Is think out to provider, really Sanara InfuSystem really same the that the if that multiple can [indiscernible] or maybe is could vendors

Richard DiIorio

as negative that's both route, the the get and and incentive, biomed company we're JV we we're right, supplier And they're the and far out and theory, integrated go with everything. all don't clinical, each and so and source, in and logistics, why revenue products. cycle, so go as we to sole we -- Yes, definitely another other, getting same onto a another boat went that, to in that have and

really is the That's when great. that So, we locks agreement. both we JV what which the wanted us entered at hip,

Alex Nowak

that's we're fall in met And the past, have and issued it the but, here, good. then front, a short just on range a it. -- guidance or little not getting we've obviously bit Okay, guidance new and had maybe we've of

about growing get leave above the a couple looking range? new the this the the range, amount what did in guess, setting So, is will a a And above versus pan second-half sort range? range cushion out items you I of, it meaningful if didn't yourself as you're above

Richard DiIorio

term, right. And couple enough small XX%, control, in it that's There in. supplier our things subjective we're the right, -- don't the a be million is $X right, always meaningful risk is of difference. guess, years, to over or numbers it deals issues, a will $X We've our We're make seen come to out last going can that million that I business. Well, already. see you are

this like not growth be much beat can wanted will How to we it factors. to up beat of But with we not year, that's combination give So, XX%? the Sure. table. cushion. a on by bit little going a We're show of ourselves we XX%

give we'll left range we'll visibility or in that, in number better we've last is QX, we, tighten be you able minimum, that that the hope want you're when with November, for us, announce better visibility. year, only through the and and Our lived years, that be runway much But we so weeks behind absolutely beat the hit right, up to eight all to hopefully early couple the it, have and six you we more conservative guys it. a at

Alex Nowak

for congrats update. keep the on Absolutely. good Well, the the thanks up results, and work,

Richard DiIorio

Thanks, Alex.

Operator

question Sidoti next of from Our & comes Jim Go Instructions] Sidoti Company. [Operator ahead.

Jim Sidoti

Hi, good and questions. morning, taking thanks for the

I pump think I heard for in quarter. you negative Barry million say Were the one-time pressure the sales quarter other, that $X.X sales maybe, would was equipment consider in there the what beyond that?

Barry Steele

No, nothing the that was do lumpish. said, a really really outside normal we healthy equipment regular the have does that quarters. next norm to stands can around. sales, of quarter out as of our sales coming tendency in what nothing sort jump other a is our That equipment, This equipment for

a it's we're pointed On it'll could we be go big be more, it a go backlog. forward, to filling pressure the but was as Doesn't out, zero could small but number; -- -- negative it equipment, certainly as we Carrie just have a number. mean we some

Jim Sidoti

Okay.

a it you terms million, would other of say, $X.X So, than that in was pretty, revenue? quarter sustainable

Barry Steele

agree, yes. I

Jim Sidoti

come like And [dual Okay. and pumps you've chain the concerned or the most in up you Is equipment you've right the has past, between supply with whatnot. on you got of you're you've for there dealt have now -- place? issues, sourcing] call, dealt (ph) feel and of a that lot then in several anything this do about with

Richard DiIorio

you're standpoint, of side single-source Jim, lot Genadyne in on, last this with issue year. into the chain years. than dead in good last the at end agreement we're ran we on supply the year, been the better have shape, couple that think, a negative we solved and was the from pressure certainly a I

don't call position. pretty end stable at know very going to said, year. get So, we're now a week, we're position. we're right That tomorrow, the or in phone in we the good a what being next of But

Jim Sidoti

with -- starts And you it's to be place in but think hire or more you ramp team clear. in? will question, asked Sanara already that revenue the or already, deal been come have folks want I this starts this to as and When next as up, go to then I deal starts have that to to out to just

Richard DiIorio

team shape. the sales in Yes, people. in of so do some order place, good of we we're to dollars millions add on That is have sure, they magnitude side, can before for

We as add to in positions. big will team, that to customer have revenue that's in cycle as quite and team, team. the the we as a have sales comes those investments add but far -- in while right, But service, backend add to have some ready And go. business the support, place that's we we'll to before

Jim Sidoti

that it me. you. Okay. for All right, Thank was

Richard DiIorio

Thanks, Jim.

Operator

now I session. question-and-answer Richard our concludes the over turn would remarks. This back to any like closing to for conference to DiIorio

Richard DiIorio

to look you. to everyone results. for thank everyone call, Thank our third on we participating our today's want I fall, call. to the day. And in discuss forward great quarter I hope has a

Operator

you concluded. conference Thank for attending The presentation. today's has now

disconnect. now You may

InfuSystem (INFU) 3 Aug 232023 Q2 Earnings call transcript