Slide 1: InfuSystem Holdings, Inc. Schedule 14A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant x Filed by a Party other than the Registrant ¨ Check the appropriate box: ¨ Preliminary Proxy Statement ¨ Conf
Slide 2: InfuSystem Holdings, Inc.
InfuSystem Holdings, Inc. NYSE Amex: INFU
Slide 3: Safe Harbor Statement
Safe Harbor Statement This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that are not historical facts. Such forward-looking stateme
Slide 4: Definitive Proxy Statement
Definitive Proxy Statement In connection with the solicitation of agent designation revocations, InfuSystem Holdings, Inc. has filed a definitiveproxystatementwith the SecuritiesandExchangeCommission(the “SEC”).STOCKHOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER RELEVANT MATERIAL
Slide 5: Investment Highlights
Investment Highlights Leading provider of infusion pumps and related services Listed on NYSE Amex Large, growing and highly fragmented market Multiple growth opportunities Meaningfulcross-sellingopportunityfrom largevolumepumpandbiomedicalrepairdivisions Strategic acquisitions of complementary infus
Slide 6: Key Investment Considerations
Key Investment Considerations Leading Market Position Comprehensive Service and Product Offering Compelling Value Proposition Diversified Base of Customers and Payors Proven Acquisition Track Record Attractive Industry Dynamics Sustainable Cash Flow Generation Conservative Capital Structure Multiple
Slide 7: InfuSystem Overview
InfuSystem Overview Infusion Pump Provider Ambulatory pumps Large volume pumps Biomedical repair Business model Third party reimbursement Direct sales Target markets Alternate site centers Small hospitals Patients Oncology clinics Home care / Home infusion Skilled nursing facilities Pain centers
Slide 8: Integrated Approach to Infusion
Integrated Approach to Infusion The combined businesses provide a full-service infusion solution Third party reimbursement and direct sales Ambulatory and non-ambulatory pumps Repair and service Same point of sale within the oncology office Core ambulatory pump business continues to see compelling g
Slide 9: Favorable Industry Dynamics
Favorable Industry Dynamics Increasing Demand for Strong Growth in Home Health Care Services Health Spending Growing Demand for Increasing Outsourcing Infusion Therapy of Non-Core Activities
Slide 10: Increasing Demand for Health Care Services
Increasing Demand for Health Care Services National Health Expenditures ($ in billions) $5,000 In 2009, the U.S. spent $2.5 trillion on $4,638 healthcare, or 18% of total GDP $4,500 Growth in U.S. national health expenditures has $4,000 significantly outpaced the overall economy $3,500 Major drivers
Slide 11: Strong Growth in Home Health Spending
Strong Growth in Home Health Spending Home Health Expenditures ($ in billions) $160 The Home Health sector represented an estimated $68.3 billion of revenue in 2009 $140 $136 Home Health is the lowest-cost clinical setting for patients, especially those with a chronic $120 illness or following an in
Slide 12: Growing Demand for Infusion Therapy
Growing Demand for Infusion Therapy Colorectal cancer (CRC) is one of the most prevalent forms of cancer in the United States The standard of care for the treatment of CRC relies upon continuous chemotherapy infusions delivered via electronic ambulatory infusion pumps Clinical evidence demonstrates
Slide 13: Increasing Outsourcing of Non-Core Activities
Increasing Outsourcing of Non-Core Activities Hospitals are increasingly outsourcing non-core activities to reduce costs, improve inefficiencies and focus on core high value acute care competencies Renting of medical equipment provides healthcare providers with greater financial and operating flexib
Slide 14: Ambulatory Oncology Infusion Overview
Ambulatory Oncology Infusion Overview Leading provider of ambulatory infusion pumps for oncologists and their patients with significant market share Pumps are primarily used for the continuous infusion of chemotherapy drugs to treat colorectal cancer Provide a complete solution to doctors & patients
Slide 15: Ambulatory Oncology Infusion Service Model
Ambulatory Oncology Infusion Service Model Step 1 New Patient prescribed CI pump by physician Step 2 Step 5 CI pump programmed, Pump returned to drug loaded and therapy InfuSystem for cleaning initiated in physician’s office and maintenance Step 4* Step 3 Documentation collected Patient wears pump f
Slide 16: Ambulatory Pump Financial Profile
Ambulatory Pump Financial Profile Average cost: ~$1,600 per pump Average monthly revenue: ~$300/pump Pump useful life: 7-10 years Depreciated over 5 years Payback: <6 months Lifetime revenue per pump: $20,000+ Ambulatory fleet: ~23,000 pumps Significant return on investment
Slide 17: Ambulatory Payor and Customer Mix
Ambulatory Payor and Customer Mix Payor Mix Customers Include 2010 Leading Cancer Institutions: Commercial CMS 36% 37% BCBS Patient 22% 5% Total number of customers: 1,400+ Strong presence with largest payors and cancer treatment centers CMS: Centers for Medicare and Medicaid Services
Slide 18: Consignment Service Line Target Market Penetration
Consignment Service Line Target Market Penetration 100% InfuSystem measures its market share not in terms of Other 10% the number of practices, but in the pool of addressable patients 80% Home The Company estimates the number of patients with a Infusion Provider particular diagnosis code in its 'boo
Slide 19: Compelling Ambulatory Value Proposition
Compelling Ambulatory Value Proposition Value to Physicians •Strengthens relationship with patient •Extensive managed care contracts •Professional service fee •Less capital intensive •Billing provided Value to Patients Value to Payors •Continuity of care •Lower cost •Reduced side effects •State of t
Slide 20: Large Volume Pump Division
Large Volume Pump Division Sells, rents, services and repairs new and pre-owned infusion pumps and other medical equipment Convenience and flexibility of rentals & leases that don’t require capital outlays but eliminate hassle of maintenance/service Leading provider to alternate site healthcare faci
Slide 21: Biomedical Repair
Biomedical Repair In-house pump repair services Large volume pumps require scheduled maintenance and calibration Helps strengthen relationship with customers Provides InfuSystem an opportunity to establish a business relationship with customers that acquired pumps through other sources Utilized to m
Slide 22: Market Opportunity
Market Opportunity Ambulatory Oncology Infusion Ambulatory infusion oncology Significant market share Competition: home infusion providers, physician owned pumps, and independent providers Source: Company estimates
Slide 23: Market Opportunity
Market Opportunity Ambulatory Oncology Oncology Infusion Infusion Ambulatory infusion Large volume pump oncology division broadens Significant market share market to overall Competition: home infusion Oncology infusion providers, physician owned Pump sales and rentals pumps, and independent Portfoli
Slide 24: Market Opportunity
Market Opportunity Ambulatory Oncology Oncology Infusion Infusion Infusion Ambulatory infusion Large volume pump Non-oncology applications Pain, Nutrition, Hydration oncology division broadens market to overall Non-oncology locations Significant market share Hospitals Competition: home infusion Onco
Slide 25: Growth Opportunity: Organic
Growth Opportunity: Organic New Clinic Opportunity Convert clinics to InfuSystem ~5,000 new clinic opportunities Cross-selling Offer biomedical repair & service nationwide to current InfuSystem customers Rent/sell a portfolio of pumps Large – volume pump division offers over 70 different models of i
Slide 26: Growth Opportunity: Acquisitions
Growth Opportunity: Acquisitions Acquisition criteria Leverage current distribution channel Introduce new products Expand InfuSystem footprint InfuSystem has a leverageable nationwide presence Highly fragmented market Most competitors are not pure-play CI pump providers Offer interesting complementa
Slide 27: InfuSystem Has the Right Plan in Place to Deliver Long-Term Value
InfuSystem Has the Right Plan in Place to Deliver Long-Term Value Company’s core vision is to become a significant leader in the infusion and pre-owned medical equipment markets Large, growing and highly fragmented market Multiple growth opportunities to increase revenues Meaningfulcross-sellingoppo
Slide 28: New Leadership Team is Successfully Executing on the Strategic Plan
New Leadership Team is Successfully Executing on the Strategic Plan Revenue The Company’s key executives have $54.6 only been in their positions for short $47.2 periods of time Sean McDevitt has been Chief $39.0 Executive Officer since September 2009 James Froisland has been Chief Financial Officer
Slide 29: Financial Highlights
Financial Highlights CInfuSystem INFUSION MADE EASY.
Slide 30: Financial Snapshot: Annual
Financial Snapshot: Annual Revenue Adjusted EBITDA * $54.6 $14.0 $12.9 $47.2 $12.1 $39.0 2009 2010 2011 2008 2009 2010 Growth YOY AEBITDA Margin 10% 21% 16% 34% 33% 30% * See our periodic earnings releases, on our website, or the Annex for reconciliation
Slide 31: Financial Snapshot: Quarterly
Financial Snapshot: Quarterly Revenue Adjusted EBITDA * $14.5 $14.0 $4.0 $13.1 $13.0 $3.7 $3.8 $3.3 1Q11 2Q11 3Q11 4Q11 4Q10 1Q11 2Q11 3Q11 Growth YOY AEBITDA Margin 19% 25% 14% 7% 28% 25% 29% 27% • See our periodicearnings releases, on our website, or the Annex for reconciliation • 4Q 2011 results
Slide 32: Balance Sheet Highlights
Balance Sheet Highlights (in thousands) 9/30/2011 12/31/2010 ASSETS Cash and Cash Equivalents 433 5,014 Total Current Assets 12,556 15,289 Total Assets 79,492 130,364 LIABILITIES Total Current Liabilities (excl. derivative liabilities) 10,471 12,198 Long-term Debt (incl. current portion) 30,248 32,1
Slide 33: Kleinheinz Dissident Group Solicitation
Kleinheinz Dissident Group Solicitation
Slide 34: A Special Meeting is Unnecessary & Costly
A Special Meeting is Unnecessary & Costly The Board does not believe that a special meeting serves the interests of InfuSystem stockholders The Board values input from stockholders and is always open to stockholder input regarding the composition of the Board The entire Board will be up for election
Slide 35: InfuSystem has a Highly-Qualified and Independent Board
InfuSystem has a Highly-Qualified and Independent Board • Six of seven Board members are independent – David Dreyer – Timothy Kopra – Pat LaVecchia V–ice Chairman – Jean-Pierre Millon – John Voris – Wayne Yetter • Sean McDevitt–Chief Executive Officer and Chairman • All directors have a deep underst
Slide 36: Strong Corporate Governance Profile
Strong Corporate Governance Profile Strong, experienced, independent Board Board is elected annually Wholly independent Audit, Compensation and Governance & Nominating committees Board members own approximately 17.3% of the Company’s outstanding shares, aligning their interests with those of stockho
Slide 37: The Board Values the Input of Our Stockholders
The Board Values the Input of Our Stockholders While the Board believes that the Company has the correct strategic plan and leadership in place, it remains open to all ideas designed to enhance stockholder value The Board and management team, with the assistance of independent financial advisors, re
Slide 38: The Kleinheinz Dissident Group has Not Articulated a New Strategy
The Kleinheinz Dissident Group has Not Articulated a New Strategy for the Company The Kleinheinz Dissident Group owns only 11.4% of the Company, yet is asking for full control of the company without paying a customary control premium To date,the KleinheinzDissidentGrouphasfailedto articulateanyplano
Slide 39: Dissident Group has Not Addressed Adverse Consequences of Replacing Entire Board
The Kleinheinz Dissident Group has Not Addressed Adverse Consequences of Replacing Entire Board If the Kleinheinz Dissident Group were to take control of the Board, there would be several immediate adverse consequences to InfuSystem: An event of default would occur under the Company’s Credit Agreeme
Slide 40: The Kleinheinz Dissident Group Nominees – Not Right for InfuSystem
The Kleinheinz Dissident Group Nominees – Not Right for InfuSystem The Company believes that the Kleinheinz Dissident Group’s nominees would fail to enhance the composition of the Board Five of the seven nominees have no meaningful experience in the healthcare industry In our view, electing the Klei
Slide 41: Protect Your Investment: Do Not Allow Dissident Group to Take Control
Protect Your Investment: Do Not Allow the Kleinheinz Dissident Group to Take Control of the Board Do not designate the Kleinheinz Dissident Group as an agent for your shares –do not sign their white agent designation card The Kleinheinz Dissident Group’s nominees have neither the qualifications nor
Slide 42: Annex
InfuSystem Holdings, Inc. Annex
Slide 43: GAAP Reconciliation Annual
GAAP Reconciliation Annual - (in millions) 2008 2009 2010 Net (loss) income $ 10.0 $ 0.8 $ (1.9) Adjustments: Interest expense 3.8 3.5 3.4 Income tax (benefit) expense 0.9 1.0 (1.4) Depreciation 3.9 4.1 5.4 Amortization 1.8 1.8 2.2 EBITDA $ 20.4 $ 11.2 $ 7.7 Adjustments: Asset impairment charges (Ga
Slide 44: GAAP Reconciliation Quarterly
GAAP Reconciliation Quarterly - (in millions) 4Q10 1Q11 2Q11 3Q11 Net (loss) income $ (2.1) $ (0.2) $ (27.6) $ (16.6) Adjustments: Interest expense 0.6 0.5 0.6 0.5 Income tax (benefit) expense (1.3) (0.1) (15.8) (6.5) Depreciation 1.5 1.6 1.6 1.7 Amortization 0.6 0.6 0.7 0.7 EBITDA $ (0.7) $ 2.4 $ (
Slide 45: InfuSystem Directors
InfuSystem Directors Sean McDevitt (Chief Executive Officer and Chairman of the Board) Sean McDevitt has served as the Company’s Chief Executive Officer since September 2009 and Chairman of the Board of Directors since August 2005. Previously, Mr. McDevitt was a Managing Director of FTN Midwest Secu
Slide 46: InfuSystem Directors
InfuSystem Directors David Dreyer David Dreyer has been a member of the Company’s Board of Directors since April 2008. Mr. Dreyer has served as Chief Financial Officer and Secretary of Patient Safety Technologies (OTCBB: PSTX), since October 2010. Previously Mr. Dreyer was Chief Financial Officer of
Slide 47: InfuSystem Directors
InfuSystem Directors Timothy Kopra Timothy Kopra has been a member of the Company’s Board of Directors since April 8, 2010. Mr. Kopra began his military service in 1985 and has held a variety of leadership and technical positions as a U.S. Army officer and aviator. After assignments within the U.S.
Slide 48: InfuSystem Directors
InfuSystem Directors Pat LaVecchia (Vice Chairman of the Board) Pat LaVecchia has been a member of the Company’s Board of Directors since September 2005 and has served as Vice Chairman since September 2009. Mr. LaVecchia served as the Company’s secretary from September 2005 to November 2007. Mr. LaV
Slide 49: InfuSystem Directors
InfuSystem Directors Jean-Pierre Millon Jean-Pierre Millon has served as a member of the Company’s Board of Directors since September 2005. Mr. Millon is a co-founder of BLS, LLC, a consulting and investing entity based in Indianapolis and established in 2002. Mr. Millon served as a consultant to Ad
Slide 50: InfuSystem Directors
InfuSystem Directors John Voris John Voris has been a member of the Company’s Board of Directors since September 2005. Mr. Voris served as the Company’s Chief Executive Officer from September 2005 until October 2007. From August 2004 to July 2005, Mr. Voris was Chairman of Epocrates, Inc., a softwar
Slide 51: InfuSystem Directors
InfuSystem Directors Wayne Yetter Wayne Yetter has served a member of the Company’s Board of Directors since September 2005. He served as Chief Executive Officer of Verispan, LLC, a healthcare information company founded by Quintiles Transnational Corp. and McKesson Corp, from September 2005 to Augu
Slide 52: InfuSystem Holdings, Inc.
InfuSystem Holdings, Inc. NYSE Amex: INFU