STUART, Fla., May 16, 2012 (GLOBE NEWSWIRE) -- Liberator Medical Holdings, Inc. (OTCBB:LBMH) announced net revenues of $14,670,000 for the three months ended March 31, 2012, an increase of $2,006,000, or 15.8%, compared with sales of $12,664,000 for the three months ended March 31, 2011. Sales for the six months ended March 31, 2012, increased by $4,582,000, or 18.4%, to $29,466,000, compared with sales of $24,884,000 for the six months ended March 31, 2011. The increase in sales was primarily due to the Company's continued emphasis on its direct response advertising campaign to obtain new customers and its customer service to maximize the reorder rates for its recurring customer base.
Gross profit for the three months ended March 31, 2012, increased by $1,093,000, or 13.9%, to $8,983,000, compared with gross profit of $7,890,000 for the three months ended March 31, 2011. For the six months ended March 31, 2012, gross profit increased by $2,105,000, or 13.4%, to $17,776,000, compared with gross profit of $15,671,000. The increase was attributed to increased sales volume for the three and six months ended March 31, 2012, compared with the same periods in 2011.
Second Quarter 2012 Highlights
- Net revenues of $14.7 million for the second fiscal quarter of 2012, representing an increase of $2.0 million, or 15.8%.
- Gross profit increased by $1.1 million, or 13.9%, to $9.0 million.
- Net income of $670,000 for the quarter, or $0.01 per share, and $1.1 million, or $0.02 per share, for the six months ended March 31, 2012.
- The Company had cash of $4.8 million at March 31, 2012 and an additional $4.4 million available on its credit facility.
- Cash flows from operations of $2.7 million for the quarter ending March 31, 2012.
- At March 31, 2012, current assets of $18.7 million exceeded current liabilities of $7.2 million by $11.5 million.
Mr. Libratore, CEO, stated: "The second quarter of our fiscal year is typically a challenging quarter for us each year due to the annual renewal of our customers' insurance coverage, primarily Medicare Part B coverage, and calendar year deductibles that must be met by the majority of our customers at the beginning of each calendar year. Despite these challenges, we were able to improve our operating margins by 240 basis points from 5.3% during the second quarter 2011 to 7.7% during the second quarter 2012 as a result operational efficiencies gained through increased sales volumes and investments made in software and technology. In addition, we generated $2.7 million in cash flow from operations during the quarter ended March 31, 2012."
Mr. Libratore added: "We receive initial contact from prospective customers in the form of leads. A certain number of leads are then qualified and become new customers. The majority of the new customers qualified from our process typically place their initial order within three to six months from the time of the customer's initial contact with us. We have demonstrated our ability to attract and retain customers with our unique customer service that generates an annuity-like revenue stream. We have introduced in our periodic reports, beginning with the quarter ending March, 31, 2012, a new chart that shows our quarterly revenue streams, including new and recurring orders, for the six months ended March 31, 2011 and 2012, based on the fiscal year we received the initial order lead from these customers."
Financial Condition
The Company had cash of $4,767,000 at March 31, 2012, compared with cash of $3,016,000 at September 30, 2011, an increase of $1,751,000. The increase in cash for the six months ended March 31, 2012, is primarily due to $845,000 of cash generated through its operation activities for the six months ended March 31, 2012, and $1,000,000 of borrowings from the credit line facility.
During the six months ended March 31, 2012, cash provided by operations was $845,000, which was the result of net income of $1,124,000 plus non-cash charges of $7,191, 000 less changes in operating assets and liabilities of $7,470,000. The non-cash charges consist primarily of $3,853,000 for amortization of deferred advertising costs, $1,973,000 for bad debt expenses, $743,000 for deferred income taxes, $409,000 for depreciation and amortization, $111,000 for inventory reserve, and $81,000 for equity based compensation associated with employee and director stock options.
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About Liberator Medical Holdings, Inc.
Liberator Medical Holdings, Inc.'s subsidiary, Liberator Medical Supply, Inc., established the Liberator brand as a leading national direct-to-consumer provider of quality medical supplies to Medicare-eligible seniors. An Exemplary Provider(TM) accredited by The Compliance Team, its unique combination of marketing, industry expertise and customer service has demonstrated success over a broad spectrum of chronic conditions. Liberator is recognized for offering a simple, reliable way to purchase medical supplies needed on a regular, ongoing, repeat-order basis, with the convenience of direct billing to Medicare and private insurance. Liberator's revenue primarily comes from supplying products to meet the rapidly growing requirements of general medical supplies, personal mobility aids, diabetes, urological, ostomy and mastectomy patients. Liberator communicates with patients and their doctors on a regular basis regarding prescriptions and supplies. Customers may purchase by phone, mail or internet, with repeat orders confirmed with the customer and shipped when needed.
| Liberator Medical Holdings, Inc. and Subsidiaries | ||||
| Condensed Consolidated Balance Sheets | ||||
| As of March 31, 2012 (unaudited) and September 30, 2011 | ||||
| (In thousands, except dollar per share amounts) | ||||
| March | September | |||
| 31, 2012 | 30, 2011 | |||
| Assets | ||||
| Current Assets: | ||||
| Cash | $ 4,767 | $ 3,016 | ||
| Accounts receivable, net of allowance of $4,597 and $4,177, respectively | 8,757 | 7,860 | ||
| Inventory, net of allowance for obsolete inventory of $255 and $144, respectively | 2,756 | 3,009 | ||
| Deferred taxes, current portion | 1,976 | 1,877 | ||
| Prepaid and other current assets | 467 | 333 | ||
| Total Current Assets | 18,723 | 16,095 | ||
| Property and equipment, net of accumulated depreciation of $2,536 and $2,186, respectively | 1,369 | 1,626 | ||
| Deferred advertising | 18,897 | 17,191 | ||
| Intangible assets, net of accumulated amortization of $58 and $25, respectively | 272 | 305 | ||
| Other assets | 121 | 163 | ||
| Total Assets | $ 39,382 | $ 35,380 | ||
| Liabilities and Stockholders' Equity | ||||
| Current Liabilities: | ||||
| Accounts payable | $ 5,982 | $ 5,008 | ||
| Accrued liabilities | 1,110 | 1,119 | ||
| Other current liabilities | 60 | 103 | ||
| Total Current Liabilities | 7,152 | 6,230 | ||
| Deferred tax liability | 4,189 | 3,347 | ||
| Credit line facility | 2,500 | 1,500 | ||
| Other long-term liabilities | 44 | 48 | ||
| Total Liabilities | 13,885 | 11,125 | ||
| Stockholders' Equity: | ||||
| Common stock, $.001 par value, 200,000 shares authorized, 48,177 and 48,135 shares issued, respectively; 48,088 and 48,046 shares outstanding at March 31, 2012, and September 30, 2011, respectively | 48 | 48 | ||
| Additional paid-in capital | 34,622 | 34,504 | ||
| Accumulated deficit | (9,123) | (10,247) | ||
| Treasury stock, at cost; 89 shares at March 31, 2012, and September 30, 2011 | (50) | (50) | ||
| Total Stockholders' Equity | 25,497 | 24,255 | ||
| Total Liabilities and Stockholders' Equity | $ 39,382 | $ 35,380 | ||
| See accompanying notes to unaudited condensed consolidated financial statements. | ||||
| Liberator Medical Holdings, Inc. and Subsidiaries | ||||
| Condensed Consolidated Statements of Operations | ||||
| For the three and six months ended March 31, 2012 and 2011 | ||||
| (Unaudited) | ||||
| (in thousands, except per share amounts) | ||||
| Three Months Ended March 31, | Six Months Ended March 31, | |||
| 2012 | 2011 | 2012 | 2011 | |
| Sales | $ 14,670 | $ 12,664 | $ 29,466 | $ 24,884 |
| Cost of Sales | 5,687 | 4,774 | 11,690 | 9,213 |
| Gross Profit | 8,983 | 7,890 | 17,776 | 15,671 |
| Operating Expenses | ||||
| Payroll, taxes and benefits | 3,577 | 2,930 | 7,041 | 5,771 |
| Advertising | 1,972 | 2,019 | 3,940 | 3,920 |
| Bad debts | 843 | 877 | 1,973 | 1,769 |
| Depreciation and amortization | 210 | 171 | 409 | 337 |
| General and administrative | 1,243 | 1,224 | 2,496 | 2,149 |
| Total Operating Expenses | 7,845 | 7,221 | 15,859 | 13,946 |
| Income from Operations | 1,138 | 669 | 1,917 | 1,725 |
| Other Income (Expense) | ||||
| Interest expense | (20) | (1) | (32) | (32) |
| Change in fair value of derivative liabilities | — | — | — | (902) |
| Gain on sale of assets | — | — | — | 2 |
| Interest income | — | 2 | — | 4 |
| Total Other Income (Expense) | (20) | 1 | (32) | (928) |
| Income before Income Taxes | 1,118 | 670 | 1,885 | 797 |
| Provision for Income Taxes | 448 | 361 | 761 | 690 |
| Net Income | $ 670 | $ 309 | $ 1,124 | $ 107 |
| Basic earnings per share: | ||||
| Weighted average shares outstanding | 48,088 | 47,996 | 48,073 | 47,704 |
| Earnings per share | $ 0.01 | $ 0.01 | $ 0.03 | $ 0.00 |
| Diluted earnings per share: | ||||
| Weighted average shares outstanding | 52,285 | 53,773 | 52,286 | 53,502 |
| Earnings per share | $ 0.01 | $ 0.01 | $ 0.02 | $ 0.00 |
| See accompanying notes to unaudited condensed consolidated financial statements. | ||||
| Liberator Medical Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Cash Flows | ||
| For the six months ended March 31, 2012 and 2011 | ||
| (Unaudited) | ||
| (in thousands) | ||
| Six Months Ended | ||
| March 31, | ||
| 2012 | 2011 | |
| Cash flow from operating activities: | ||
| Net Income | $ 1,124 | $ 107 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 4,262 | 4,172 |
| Change in fair value of derivative liabilities | — | 902 |
| Equity based compensation | 81 | 236 |
| Provision for doubtful accounts and contractual adjustments | 1,994 | 1,865 |
| Non-cash interest related to convertible notes payable | — | 21 |
| Deferred income taxes | 743 | 690 |
| Reserve for inventory obsolescence | 111 | 28 |
| Gain on sale of assets | — | (2) |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (2,891) | (2,561) |
| Deferred advertising | (5,558) | (8,954) |
| Inventory | 141 | (458) |
| Other assets | (72) | (179) |
| Accounts payable | 974 | 2,409 |
| Accrued liabilities | (13) | (308) |
| Other liabilities | (51) | (37) |
| Net Cash Flow Provided by (Used in) Operating Activities | 845 | (2,069) |
| Cash flow from investing activities: | ||
| Purchase of property and equipment | (101) | (163) |
| Proceeds from the sale of assets | — | 3 |
| Net Cash Flow Used in Investing Activities | (101) | (160) |
| Cash flow from financing activities: | ||
| Proceeds from employee stock purchase plan | 41 | 44 |
| Proceeds from credit line facility | 1,000 | — |
| Costs associated with credit line facility | (21) | (51) |
| Payments of debt and capital lease obligations | (13) | (598) |
| Net Cash Flow Provided by (Used in) Financing Activities | 1,007 | (605) |
| Net increase (decrease) in cash | 1,751 | (2,834) |
| Cash at beginning of period | 3,016 | 7,428 |
| Cash at end of period | $ 4,767 | $ 4,594 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for interest | $ 31 | $ 49 |
| Cash paid for income taxes | $ — | $ 5 |
| Supplemental schedule of non-cash investing and financing activities: | ||
| Capital expenditures funded by capital lease borrowing | $ 18 | $ — |
| Common stock issued for conversion of debt | $ — | $ 5,100 |
| See accompanying notes to unaudited condensed consolidated financial statements. | ||
Safe Harbor Statement
In this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Such risks and uncertainties may include, but are not limited to, regulatory limitations on the medical industry in general, working capital constraints, fluctuations in customer demand and commitments, fluctuation in quarterly results, introduction of new services and products, commercial acceptance and viability of new services and products, pricing and competition, reliance upon subcontractors and vendors, the timing of new technology and product introductions, and the risk of early obsolescence of our products. Liberator's most recent annual report on Form 10-K and quarterly reports on Form 10-Q provide information about these and other factors, which we may revise or supplement in future reports to the SEC.