Infusystems Holdings, Inc. · AMEX:INFU
Infusystems — InfuSystem Holdings — Investor Presentation (September 2015)
46 slides from Infusystems's investor presentation, Sep 30, 2015
Slide 1: Corporate Presentation September 2015
Exhibit 99.1 (NYSE MKT: INFU) CORPORATE PRESENTATION SEPTEMBER 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements contained in this presentation are forward-looking statements and are based on future expectations, plans and prospects for the business and operations of InfuSystem Holdings, Inc. (“InfuSystem” or “the Company”) that involve a number of risks and uncertainti
Slide 3: About InfuSystem
About InfuSystem ® (NYSE MKT: INFU) InfuSystem provides infusion pumps and related products and services for patients in the home, oncology clinics, ambulatory surgery centers, and other health care sites. • Improving access to quality medical equipment required by clinicians • Delivering products a
Slide 4: Investment Highlights
Investment Highlights Revenue • InfuSystem is a dominant provider in the at-home $70 $62.3 $66.5 $58.8 oncology infusion pump market $60 $54.6 • 30%+ market share $47.2 $50 $39.0 • Business generates substantial annual cash flow $40 • $16.1 M AEBITDA in 2014 $30 • $8.5 M of Free Cash Flow* $20 $10 •
Slide 5: InfuSystem: Leading Provider of Oncology Infusion Pumps
InfuSystem: Leading Provider of Oncology Infusion Pumps Core Business: Leading provider to Patients, Hospitals and Infusion Clinics in North America • InfuSystemenables oncology patients the comforts of at-home treatment • Permits hospitals and clinics access to INFU’s large inventory without a capi
Slide 6: Dominant Player in Our Niche
Dominant Player in Our Niche • InfuSystem pumps permit oncology patients to receive treatment in the comfort of their home. • 24/7 on-call oncology nurses • InfuSystem is the market leader with more than ~1,600* hospitals and oncology practice sites served in North America. • 13 of the 20 top leadin
Slide 7: Management Executing On Value-Creation Strategy
Management Executing On Value-Creation Strategy New management team focused on “Value- Creation Strategy” through series of strategic initiatives Four unique business models to capture increasing share of market opportunity and benefit from changing payor mix Accretive acquisition to expand market s
Slide 8: Four Revenue Streams Driving Cash Flows
Value-Creation Strategy FOUR REVENUE STREAMS DRIVING CASH FLOWS INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 8
Slide 9: Four Revenue Streams to Drive Cash Flows
Four Revenue Streams to Drive Cash Flows Patient-Based Hospital-Home Care Service & Repair Product Sales Rental (TPP) Based Rental (Direct) 3% of 2014 Sales 12% of 2014 Sales 72% of 2014 Sales 13% of 2014 Sales • A hospital/clinic provides • A hospital/clinic rents an • InfuSystemwill service • Infu
Slide 10: Revenue Growth Rental and Sales
Revenue GrowthRental - and Sales $65 Rental Revenues Product Sales (Gross to Net Collected) $59.8 $60 $58.7 $9 $56.0 $4.6 $7.8 $7.8 $5.8 $8 $55 $53.5 $6.5 $6.9 $5.3 $7 $50 $6.3 $46.8 $6 $45 $5.4 $4.1 $5 $40 $55.2 $4 $52.9 $35 $49.5 $48.2 $3 $42.7 $30 $2 $25 $1 $20 $0 FY2011 FY2012 FY2013 FY2014 TTM
Slide 11: Net Collected Revenue
Net Collected Revenue As new healthcare laws have been enacted, the focus on net collected revenue becomes increasingly important as a direct result of focus on contractual insurance changes Company's increased focus on collecting patient billings • In-Network agreements • Improved billing protocol
Slide 12: Strong Customer Stickiness Leads to High Revenue Predictability
Strong Customer “Stickiness” Leads to High Revenue Predictability Growth in Oncology Customers and 2,400 • Strong value placed on hospital/clinic In-Network Payor Contracts 2,000 1,800 contracts and relationships due to strong 1,600 1,600 1,500 “reorder/recurring” revenue component 1,400 1,200 • Inf
Slide 13: Strategic Acquisitions to Strengthen Market Share in Core Oncology Business
Value-Creation Takeaway STRATEGIC ACQUISITIONS TO STRENGTHEN MARKET SHARE IN CORE ONCOLOGY BUSINESS INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 13
Slide 14: Strategic Acquisition to Increase Market Share
Strategic Acquisition to Increase Market Share InfuSystem has the largest inventory of home infusion pumps for the oncology market in the U.S. • In April 2015, the company acquired Ciscura Holding Company, Inc., based in Alpharetta, Georgia • Acquired inventory of approximately 1,800 infusion pumps
Slide 15: Faster Turnaround Times and Improved Utilization
Faster Turnaround Times and Improved Utilization InfuSystem Service Centers • Reduced cost of air shipments Toronto Canada Service Center • Improved utilization of pump fleet Madison Heights • Increased market share of Service Center “Same-Day” rental market Kansas City ISO 9001 Certification and CH
Slide 16: Expanding Into Adjacent Addressable Markets to Drive Growth
Value-Creation Takeaway EXPANDING INTO ADJACENT ADDRESSABLE MARKETS TO DRIVE GROWTH INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 16
Slide 17: Expansion into At-Home Pain Management Infusion Pump Market
Expansion into At-Home Pain Management Infusion Pump Market Pain relieving effects of a peripheral nerve block can be extended by using a continuous peripheral nerve block catheter, local anesthetic $10 BILLION & an electronic infusion pump • Growing therapy in an estimated $700 million market • 5.7
Slide 18: Investments Into Next Generation Systems and Technologies
Value-Creation Takeaway INVESTMENTS INTO NEXT GENERATION SYSTEMS AND TECHNOLOGIES TO INCREASE CUSTOMER RETENTION INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 18
Slide 19: InfuConnect: Enhancing Customer Retention and Future Growth Driver (EMR)
InfuConnect: Enhancing Customer Retention and Future Growth Driver (EMR) EMRIntegration– Simpleas1-2-3 • Industry-Leading True- Paperless Solution • More accurate / More efficient • Smart Data Listener & Extractor • Save up to 20 minutes per patient • Clinics can do more with the time they have Ambu
Slide 20: InfuConnect: Life Cycle Management
InfuConnect: Life Cycle Management Fleet Management Made Easy State of the Art Asset • Order Additional Pumps Tracking and Management • Schedule Service & Repair • Track Assets in Real Time • Access Recertification Docs • Improve Recovery Rates • Online, Anytime • Extend Asset Life • Track From Any
Slide 21: Pain Management and Reporting
Pain Management and Reporting Real-Time Pain Score Reporting • Supporting High Patient Satisfaction • Online, Anytime INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 21
Slide 22: Financial Overview
Value-Creation Takeaway FINANCIAL OVERVIEW INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 22
Slide 23: Total Revenue: Total vs Net Collected
Total Revenue: Total vs Net Collected Total Revenues $70 (Gross to Net Collected) $66.5 $66.8 $62.3 $5.8 $4.6 $60 $58.8 $6.5 $54.6 $5.3 $4.1 $50 $47.2 $4.5 $40 $39.0 $60.7 $62.2 $55.8 $4.0 $53.5 $50.5 $42.7 $30 $35.0 $20 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014 TTM as of 6/30/2015 Net Collected Rev
Slide 24: Strong Gross and Adjusted EBITDA Margins
Strong Gross and Adjusted EBITDA Margins Gross Margins Adjusted EBITDA Margins See Appendix for Reg G Reconciliation 75% 30% 72.9% 71.2% 70.8% 25.6% 70.1% 24.8% 70% 25% 24.2% 22.3% 65% 64.7% 20% 18.8% 60% 15% FY2011 FY2012 FY2013 FY2014 TTM as of FY2011 FY2012 FY2013 FY2014* TTM as of 6/30/15 6/30/1
Slide 25: Free Cash Flow and Adjusted EBITDA
Free Cash Flow and Adjusted EBITDA Free Cash Flow* Adjusted EBITDA SeeAppendixforRegGReconciliation SeeAppendixforRegGReconciliation $10 $17 $16.5 $8.9 $16.0 $16.1 $9 $8.5 $16 $8 $15 $7 $14 $6 $13.1 $13 $5 $12 $4 $11 $3 $10.3 $10 $2 $9 $1 $0.6 $0 $8 FY2011 FY2012 FY2013 FY2014 FY2011 FY2012 FY2013 F
Slide 26: Net Income and Diluted EPS
Net Income and Diluted EPS Net Income Earnings Per Share $5 Fully Diluted Basis $3.6 $0.06 $4 $3.4 $0.05 $0.05 $3 $0.05 $0.04 $0.04 $1.7 $0.04 $0.04 $2 $0.03 $0.03 $1 $0.03 $0.03 $0 $0.02 FY2011 FY2012 FY2013 FY2014 TTM as of $0.01 ($1) 6/30/15* $0.01 $0.00 $0.00 $0.00 ($1.5) ($2) $0.00 ($3) ($0.01)
Slide 27: Increased Borrowing Facility to Expand Future Pump Inventory
Increased Borrowing Facility to Expand Future Pump Inventory • History of strong Free Cash Flows providing added borrowing capacity to expand growth of pump inventory • Reduced cost of capital on new credit facility allows for increased Return on Invested Capital • Current rate of less than 3.0% vs
Slide 28: New $45 Million Credit Facility
New $45 Million Credit Facility $45 million credit facility signed with JPMorgan Chase in March 2015 • Term is five years • $10 million revolverundrawn – at close • $27 million Term Loan Afully – drawn at close • $8 million Term Loan B undrawn – at close • Expansion capital (including acquisition of
Slide 29: Significant Barriers to Entry
Significant Barriers to Entry Established, long standing relationship with oncology practices • More than ~1,600 facilities* • Growing Third Party Payor contracts • ~300 insurance contracts* • 98.7% retention of customer business Largefleet of ambulatoryinfusionpumps– ~60,000pumps • Generate revenue
Slide 30: Why Invest in InfuSystem?
Why Invest in InfuSystem? LeadingOperatorin CoreBusiness– OncologyInfusion • Dominate player in oncology infusion market • Large fleet of ambulatory pumps for Rental or Sale • Expanding Market Share • Aging Population and Cancer Growth Solid Financial Performance • Strong Cash Flows and Solid Gross
Slide 31: Questions?
Questions? IR Contact Info: Joe Dorame, Managing Partner LythamPartners, LLC Russell Microcap® Index 602-889-9700 (NYSE MKT: INFU) dorame@lythampartners.com
Slide 32: Appendix
InfuSystem—Infusion Made Easy APPENDIX INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 32
Slide 33: Company Snapshot
Company Snapshot InfuSystemHoldings, Inc. Summary Trading Statistics* • Headquarters: Madison Heights, MI • Stock Price: $2.88* • Enterprise Value: $98.60M • Founded: 1998 • 52-Wk Range: $2.22-$4.50• EV / LTM AEBITDA: 5.97x • Specialization: Healthcare / Medical Instruments & Supplies• Market Cap: $
Slide 34: InfuSystem Niche – Extension of Clinic to Home
InfuSystem Niche –Extension of Clinic to Home Ambulatory Home Infusion Patient-Based Rental TPP Payor Contracts • 25-year old business model in • Bills patient insurance• Awarded contracts in DME billing all 9MSAs (1 of 4 • 300+ Commercial and National Vendors) • At home, at work, at play, all while
Slide 35: Hospital-Home Care Based Direct Payor Business Model
Hospital-Home Care Based Direct Payor Business Model • InfuSystem’s Hospital-Home Care Based (DP) business is focused primarily on the sale, rental, financing and accompanying service of movable medical equipment to hospitals and alternate care sites who pay InfuSystem directly –no third-party reimb
Slide 36: Hospital-Home Care Based Direct Payor Offerings
Hospital-Home Care Based Direct Payor Offerings Leading Provider of New and Pre-Owned Pumps Pre-Owned & New Pumps from Top Manufacturers • InfuSystem offers new pumps from top brands • Broker-dealer trading desk • In addition, over 70 models and versions of pre-owned pumps are offered • Pre-owned pu
Slide 37: Medical Equipment Service & Repair
Medical Equipment Service & Repair • In addition to supporting and repairing InfuSystem’s in-house fleet, the Company certifies, recalibrates, repairs and services a variety of infusion pumps • Pumps require scheduled maintenance and calibration in accordance with manufacturer’s specifications and r
Slide 38: Competitive Bidding Overview
Competitive Bidding Overview Competitive Bidding Overview InfuSystem’s Response to Competitive Bidding • InfuSystemwas not involved in Round 1 nor Round 2 of • InfuSystem has actively prepared the Company for potential Competitive Bidding regulatory changes and reimbursement changes • CMS completed
Slide 39: Impact of Debt & Leverage on Valuation Multiple
Impact of Debt & Leverage on Valuation Multiple Enterprise Value / AEBITDA 3X 4X 5X 6X 7X 8X 9X 10X 0% • Management’s strategy is to increase 10% enterprise value (EV) and lower Q1-14 leverage via a combination of profitable Stock Price = $2.77 growth and repayment of debt 20% EV = $89.5M AEBITDA =
Slide 40: Leverage: Total Debt to Book Equity
Leverage: Total Debt to Book Equity US$ millions $50 90% April 2015 - 78% Acquires Ciscura 73% for $5.4M 73% 75% $40 63% $34.78 $31.27 55% 60% $29.13 $30 $26.73 $25.48 45% $20 30% $10 15% $2.33 $0.80 $1.14 $0.52 $0.79 $0 0% 2011 2012 2013 2014 6 Months Ended 06/30/15 Fiscal Year Total Debt Cash Debt
Slide 41: Non-GAAP Reconciliation: Annual Net Income to Adjusted EBITDA
Non-GAAP Reconciliation: Annual Net Income to Adjusted EBITDA Unaudited, in US$ thousands FY2011 FY2012 FY2013 FY2014 Net Income (45,443) (1,489) 1,669 3,356 plus Interest 2,193 3,340 3,497 3,134 plus Tax (23,134) (663) 1,031 2,853 plus Depreciation 6,386 5,668 5,415 3,626 plus Amortization 2,662 2,
Slide 42: Non-GAAP Reconciliation: TTM Net Income to Adjusted EBITDA by Quarter
Non-GAAP Reconciliation: TTM Net Income to Adjusted EBITDA by Quarter Trailing 12 Unaudited, in US$ thousands 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Months Net Income 852 1,036 (415) 783 2,256 plus Interest Expense 752 779 672 387 2,590 plus Income Tax Expense 842 946 (285) 147 1,650 plus Depreciation 938
Slide 43: Non-GAAP Reconciliation: Annual Net Income to Free Cash Flow
Non-GAAP Reconciliation: Annual Net Income to Free Cash Flow* Unaudited, in US$ thousands FY2011 FY2012 FY2013 FY2014 Net Income (45,443) (1,489) 1,669 3,356 plus Interest 2,193 3,340 3,497 3,134 plus Tax (23,134) (663) 1,031 2,853 plus Depreciation 6,386 5,668 5,415 3,626 plus Amortization 2,662 2,
Slide 44: Non-GAAP Reconciliation: TTM Operating Income to Normalized Net Income and EPS
Non-GAAP Reconciliation: TTM Operating Income to Normalized Net Income and EPS by Quarter Trailing 12 Unaudited, in US$ thousands except per share values 3Q2014 4Q2014 1Q2015 2Q2015 Months Operating Income $2,443 $2,774 $1,552 $1,317 8,086 Adjustments: IntegrationCosts–Ciscura 0 0 255 351 606 Intere
Slide 45: Detailed Historical P&L
Detailed Historical P&L (000's) 12/31/09 12/31/10 12/31/11 12/31/12 12/31/13 12/31/14 Net revenues: Rentals $ 38,606 $ 43,384 $ 46,795 $ 53,471 $ 55,962 $ 58,718 Product sales 358 3,845 7,842 5,357 6,318 7,769 Net revenues: 38,964 47,229 54,637 58,828 62,280 66,487 Cost of Revenues: Product, service
Slide 46: Detailed Historical Balance Sheet
Detailed Historical Balance Sheet INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 46
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