$INFU FY 2015 Results Review

Infusystems ($INFU) released Fourth Quarter 2015 and Full Year 2015 earnings today which were very good.  The company has executed very well over the past 3 years and momentum is really building in terms of revenue growth and earnings growth.  I wanted to cover some of my thoughts about the 2015 10-K, conference call, and news release.  I’ve been invested in $INFU for a few years now, and I believe the business is still on the right track to keep growing and producing cash flow for the foreseeable future.   Highlights for the full year 2015: Revenue of $72.1m for the full year which was 9% growth over FY2014 Rental Revenue grew 10% YoY and billings actually increased 12% but since the mix of in-network and out-of-network payor’s caused the collected revenue to be lower than billing increases Gross Profit held steady at 71% but the Gross Profits / Total Assets dropped to 53% from 59% in FY2014 Reduced Interest Expense by $1.4m because of the new credit facility Cash Flow from Operations was $7.1m even with the purchase of Ciscura and penalty for the early extinguishment of debt ($1.6m) EBITDA was $15.5m and if the fee for the debt…

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InfuSystem Holdings Q2 2013 Review

$INFU released their 2013 Q2 earnings and completed their conference call.  You can read the 10Q and conference call transcripts from the links.  Since the recent failed take private situation, I wanted to review what is happening with the company. Positive Revenue up 4% from Q2 2012 Management has made strides in expanding their business model outside of the oncology market.  Meaningful revenue was not shown this quarter, but it’s good to see that the company is expanding to other markets.  Long-term care is one of markets, which is a good market to enter, along with post-surgical pain.  These markets require different types of pumps, but fit the INFU model well.  From the conference call it sounds like $250,000 was spent on smart pumps (for long-term care) which will generate $375,000 in revenue.  Not much revenue yet, but the return is very similar to the oncology market at $1.50.  This is a good sign that the business model can be expanded to other markets profitably. Management is making strides in reducing costs by rolling out new ordering processes including the roll-out of iPads, and upgrading their IT services.  Streamlining these processes will cut costs, and allow INFU to be more…

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Ryan Morris makes his initial bid for INFU

Last night, Meson Capital Partners (i.e. Ryan Morris) filed the anticipated offer to purchase InfuSystems.  The offer was for a price per share of between $1.85 to $2.00 in cash.  I view this as an initial offer, as the price is at the low end of the range I was expecting.  If you want to read the letter, click here and read the short letter.  From the language in the letter, it sounds like a purchase can happen quickly if the special committee and Meson Capital can agree upon a satisfactory price.  $INFU closed the day yesterday at $1.55 per share providing an upside of ~20-30%. The special committee has already filed a response to the official offer, which can be read here.  The full 8-k is available for full reading.  I agree with the committee that the purchase price underscores the value of INFU.  The language in letter definitely is favorable to working with Morris to come to a satisfactory price, and even provides him exclusivity for more due diligence.  Confirmation of financing commitments was also requested. With the recent changes to the contracts of the executives providing them change of control compensation, I believe that management will  agree to a price…

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