STUART, Fla., Feb. 12, 2010 (GLOBE NEWSWIRE) -- Liberator Medical Holdings, Inc. (OTCBB:LBMH) today announced record results for its fiscal first quarter ended December 31, 2009, including net revenue of $9.15 million and net income of $854 thousand.
Fiscal First Quarter 2010 Highlights
- Net revenue for the first quarter ended December 31, 2009, was $9.15 million, an increase of 71.4% from $5.34 million for the quarter ended December 31, 2008.
- Gross profit for the first quarter ended December 31, 2009, was $5.91 million, an increase of 68.8% from $3.50 million for the quarter ended December 31, 2008.
- The Company's operating expenses for the three months ended December 31, 2009, were $4.75 million, or 51.9% of revenue, compared to $2.99 million, or 56.0%, of revenue for the three months ended December 31, 2008.
- Net income increased to $854 thousand, an increase of 247%, from $246 thousand for the quarter ended December 31, 2008.
- The Company had $2.88 million in cash as of December 31, 2009.
Revenues:
Sales for the three months ended December 31, 2009, increased by $3,816,000, or 71.4%, to $9,158,000, compared with sales of $5,342,000 for the three months ended December 31, 2008. The increase was due to a substantial direct-response advertising campaign to obtain new mail order customers. Direct-response advertising costs for the three months ended December 31, 2009, were $2,037,000, compared with $713,000 for the three months ended December 31, 2008.
Gross Profit:
Gross profit for the three months ended December 31, 2009, increased by $2,409,000, or 68.8%, to $5,910,000, compared with gross profit of $3,501,000 for the three months ended December 31, 2008. The increase was attributed to an increased sales volume for the three months ended December 31, 2009, compared to the three months ended December 31, 2008. As a percentage of sales, gross profit decreased by 1.0% to 64.5% of sales for the three months ended December 31, 2009, compared to 65.5% of sales for the three months ended December 31, 2008. The 1.0% decrease in profit margin is primarily the result of high use of overnight and second day mail during the months of November and December 2009 to assure delivery on time during the three major holidays and, to a small degree, product mix. .
Operating Expenses:
Operating expenses for the three months ended December 31, 2009, were $4,750,000, or 51.9% of revenue, compared with $2,990,000, or 56.0% of revenue for the three months ended December 31, 2008. The increase in operating expenses is primarily attributed to increased spending levels for additional employees, advertising costs, rent and other administration costs to support sales growth. The reduction of operating expenses as a percentage of sales reflects the lower costs associated with recurring sales from our established customers compared to the higher cost associated with processing new customers. We expect operating expenses to continue to decrease as a percentage of sales going forward as the recurring portion of our business increases as a percentage of our overall net sales.
Income from Operations:
Income from operations for the three months ended December 31, 2009, increased $649,000 to $1,160,000, compared with $511,000 for the three months ended December 31, 2008. As a percentage of sales, operating income improved by 3.1% to 12.7% of sales for the three months ended December 31, 2009, compared with 9.6% of sales for the three months ended December 31, 2008. The increase in operating income and margins for the three months ended December 31, 2009 is attributed to increased sales volumes at lower levels of incremental operating expenses as a percentage of sales.
Other Income (Expense):
Other income (expense) is predominantly interest expense associated with convertible debt, shareholder loans, and the Company's credit line facility. Interest expense decreased by $30,000 to $243,000 for the three months ended December 31, 2009 compared with $273,000 for the three months ended December 31, 2008. The decrease is primarily attributed to a reduction in non-cash interest expense associated with the amortization of discounts on outstanding convertible notes payable.
Liquidity and Capital Resources
The Company had cash of $2,881,000 at December 31, 2009, compared with cash of $3,798,000 at September 30, 2009, a decrease of $917,000. The decrease in cash for the three months ended December 31, 2009, is primarily due to an accelerated direct-response advertising campaign and the build out of our new 24,000 square foot facility during the quarter, partially offset by borrowings from a credit line facility.
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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.
Safe Harbor Statement
Certain statements in this press release that are not historical, but are forward-looking, are subject to known and unknown risks and uncertainties which may cause the Company's actual results in future periods to be materially different from any future performance that may be suggested in this press release. Such risks and uncertainties may include, but are not limited to, the Company's need to raise equity capital and its ability to obtain equity financing on acceptable terms, if at all, 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, the risk of early obsolescence of our products and the other factors listed under "Risks and Uncertainties" in our annual report on Form 10-K for the fiscal year ended September 30, 2009 and our other filings with the Securities and Exchange Commission. We assume no obligation to update the information contained in this news release.
| Liberator Medical Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Balance Sheets | ||
| (in thousands, except per share amounts) | ||
| December 31, 2009 | September 30, 2009 | |
| Assets | (unaudited) | |
| Current Assets | ||
| Cash | $2,881 | $3,798 |
| Restricted cash | 1,053 | 500 |
| Accounts receivable, net of allowances of $2,717 and $2,327, respectively | 4,664 | 3,850 |
| Inventory, net of allowance for obsolete inventory of $110 and $110, respectively | 933 | 902 |
| Deferred advertising, current portion | 2,678 | 2,016 |
| Debt issuance costs, current portion | 242 | 347 |
| Other | 246 | 136 |
| Total Current Assets | 12,697 | 11,549 |
| Property and Equipment | ||
| Property and Equipment, net of accumulated depreciation of $1,116 and $1,021, respectively | 1,726 | 1,041 |
| Other Assets | ||
| Deferred advertising, net of current portion | 2,305 | 1,739 |
| Debt issuance costs, net of current portion | — | 7 |
| Deposits | 258 | 123 |
| Total Other Assets | 2,563 | 1,869 |
| Total Assets | $16,986 | $14,459 |
| Liabilities and Stockholders' Equity | ||
| Current Liabilities | ||
| Accounts payable | $2,834 | $2,089 |
| Accrued liabilities | 560 | 716 |
| Credit line facility | 750 | — |
| Stockholder loan | 1,315 | 1,515 |
| Convertible notes payable, net of unamortized discount of $247 and $292, respectively | 6,286 | 3,893 |
| Capital lease obligations, current portion | 77 | 80 |
| Deferred rent liability, current portion | 38 | 60 |
| Total Current Liabilities | 11,860 | 8,353 |
| Long-Term Liabilities | ||
| Convertible notes payable, net of unamortized discount of $0 and $90, respectively | — | 2,447 |
| Capital lease obligations, net of current portion | 53 | 70 |
| Deferred rent liability, net of current portion | 185 | 165 |
| Deferred tax liability | 503 | — |
| Total Long-Term Liabilities | 741 | 2,682 |
| Total Liabilities | 12,601 | 11,035 |
| Stockholders' Equity | ||
| Common stock, $.001 par value, 200,000 shares authorized; 33,298 and 32,462 shares issued, respectively; 33,209 and 32,377 shares outstanding at December 31, 2009 and September 30, 2009, respectively | 33 | 32 |
| Additional paid-in capital | 11,820 | 11,705 |
| Accumulated deficit | (7,418) | (8,272) |
| 4,435 | 3,465 | |
| Less: Treasury stock, at cost; 89 and 85 shares at December 31, 2009 and September 30,2009, respectively | (50) | (41) |
| Total Stockholders' Equity | 4,385 | 3,424 |
| Total Liabilities and Stockholders' Equity | $16,986 | $14,459 |
| Liberator Medical Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Operations | ||
| For the three months ended December 31, 2009 and 2008 | ||
| (Unaudited) | ||
| (in thousands, except per share amounts) | ||
| 2009 | 2008 | |
| Sales | $9,158 | $5,342 |
| Cost of Sales | 3,248 | 1,841 |
| Gross Profit | 5,910 | 3,501 |
| Operating Expenses | ||
| Payroll, taxes and benefits | 2,169 | 1,065 |
| Advertising | 806 | 298 |
| Bad debts | 655 | 679 |
| Depreciation | 95 | 66 |
| General and administrative | 1,025 | 882 |
| Total Operating Expenses | 4,750 | 2,990 |
| Income from Operations | 1,160 | 511 |
| Other Income (Expense) | ||
| Interest expense | (243) | (273) |
| Interest income | 3 | 8 |
| Total Other Income (Expense) | (240) | (265) |
| Income before Income Taxes | 920 | 246 |
| Provision for Income Taxes | 66 | — |
| Net Income | $854 | $246 |
| Basic earnings per share: | ||
| Weighted average shares outstanding | 32,848 | 32,049 |
| Earnings per share | $0.03 | $0.01 |
| Diluted earnings per share: | ||
| Weighted average shares outstanding | 51,350 | 35,970 |
| Earnings per share | $0.02 | $0.01 |
| Liberator Medical Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Cash Flows | ||
| For the three months ended December 31, 2009 and 2008 | ||
| (Unaudited) (in thousands) | ||
| 2009 | 2008 | |
| Cash flow from operating activities: | ||
| Net Income | $854 | $246 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
| Depreciation and amortization | 905 | 357 |
| Equity based compensation | 133 | 136 |
| Provision for doubtful accounts and sales returns | 763 | 679 |
| Non-cash interest related to convertible notes payable | 180 | 162 |
| Deferred income taxes | 63 | — |
| Amortization of non-cash debt issuance costs | 9 | 10 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (1,576) | (1,190) |
| Deferred advertising | (2,037) | (680) |
| Inventory | (31) | (275) |
| Other assets | (150) | 80 |
| Accounts payable | 744 | 928 |
| Accrued expenses | (179) | 6 |
| Deferred rent | (2) | (12) |
| Net Cash Flow Provided by (Used in) Operating Activities | (324) | 447 |
| Cash flow from investing activities: | ||
| Purchase of property and equipment | (780) | (29) |
| Purchase of certificates of deposit | (553) | — |
| Net Cash Flow Used in Investing Activities | (1,333) | (29) |
| Cash flow from financing activities: | ||
| Proceeds from issuance of convertible notes | — | 2,500 |
| Costs associated with issuance of convertible notes | — | (310) |
| Proceeds from the exercise of warrants | 163 | — |
| Proceeds from employee stock purchase plan | 56 | — |
| Proceeds from credit line facility | 750 | — |
| Purchase of treasury stock | (9) | (3) |
| Payments of debt and capital lease obligations | (220) | (16) |
| Net Cash Flow Provided by Financing Activities | 740 | 2,171 |
| Net increase (decrease) in cash | (917) | 2,589 |
| Cash at beginning of period | 3,798 | 1,173 |
| Cash at end of period | $2,881 | $3,762 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for interest | $105 | $93 |
| Cash paid for income taxes | $12 | $— |
| Supplemental schedule of non-cash investing and financing activities: | ||
| Capital expenditures funded by capital lease borrowings | $— | $17 |
| Common stock issued for interest expense | $45 | $— |
| Common stock issued for conversion of debt | $150 | $— |