Full Press Release Details
CORPORATE PRESENTATION SEPTEMBER 2016
(NYSE MKT: INFU) Exhibit 99.1
Safe Harbor Statement INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 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 uncertainties. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying
certain factors that could cause actual results to materially differ from those indicated by these forward-looking statements. Those factors, risks and uncertainties include, but are not limited to: potential changes in overall healthcare
reimbursement, including CMS competitive bidding; sequestration; concentration of customers; increased focus on early detection of cancer; competitive treatments; dependency on Medicare Supplier Number; availability of chemotherapy drugs; global
financial conditions; changes and enforcement of state and federal laws; dependency on suppliers; risks associated with acquisitions and joint ventures, including integration risks; US Healthcare Reform; relationships with healthcare professionals
and organizations; technological changes related to infusion therapy; dependency on websites and intellectual property; dependency on key personnel; dependency on banking relationships; risks associated with our common stock, as well as any
litigation to which the Company may be subject from time to time; and other risk factors as discussed in the Company's annual report on Form 10-K for the year ended December 31, 2015 and in subsequent filings made by the Company from time to
time with the Securities and Exchange Commission (the "SEC"), which can be obtained via the SEC's Edgar website or by contacting the Company or the SEC. Forward-looking statements in this presentation are made as of September 26,
2016, and, unless required by law, the Company disclaims any duty to supplement, update or revise such statements, whether as a result of subsequent developments, changed expectations or otherwise. The Company regularly posts important information
to the investors section of its website.
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 and processes that drive
down the cost of infusion care Promoting patient care and safety, optimizing clinical outcomes About InfuSystem (NYSE MKT: INFU) INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST
Investment Highlights INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST InfuSystem is a dominant provider in the at-home oncology infusion pump market 30%+ market share Business generates substantial annual cash flow $18.8 M AEBITDA in 2015 and $19.4 M for the TTM ending 2Q16
$7.9 M of Free Cash Flow* in 2015 Substantial barriers to entry for potential new market entrants Pump fleet / Insurance contracts / EMR 15 of the last 16 quarters have been profitable New management team took over 4 years ago Strong gross margins,
consistently above 70% Industry leading EMR connectivity to hospitals and clinics Significantly Reduced Cost of Capital $ Millions Revenue $ Millions Adjusted EBITDA* 2014 does NOT add-back the following charges: G&A expense on IT and Pain
Management initiatives of $0.7M, a write-off of pumps $0.4M, severance of $0.2M *Free Cash Flow is presented under a new definition as of 12/31/2015. Please see appendix for Regulation G reconciliation of Free Cash Flow. *TTM as of
InfuSystem: Leading Provider of
Oncology Infusion Pumps INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Four Revenue Streams to Drive Cash Flows (FY 2015) Core Business: Leading provider to Patients, Hospitals and Infusion Clinics in North America InfuSystem enables
oncology patients the comforts of at-home treatment Permits hospitals and clinics access to INFU's large inventory without a capital equipment purchase, while improving patient outcomes and driving down healthcare costs. INFU generates
consistent recurring rental revenue Key Differentiators / Competitive Advantages Largest inventory & fleet of infusion pumps: ~$58 M at historical cost ~420 payor networks under contract* ~1,750 customer/facility count* World-class ISO service
centers Significant barriers to entry for new participants Growth Drivers Pain Management expansion and other cancers Innovative EMR connectivity "InfuConnect" with hospitals and clinics Expanded portfolio - infusion related disposable
sales New infusion drugs *As of June 30, 2016
Dominant Player in Our Niche INNOVATION
| TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 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 ~1,750* customer/facility count -
hospitals and oncology practice sites served in North America. 13 of the 20 top leading cancer institutions Total home infusion market is $10 billion. Oncology market treatable via continuous infusion is estimated to exceed $200 million annually.
Cancer rates growing (NIH) In 2015 1.7M new cases of cancer in U.S. 39.6% of men & women will be diagnosed with cancer during their lifetimes U.S. cancer care could reach $156 billion in 2020 At-home treatment substantially drives down
healthcare costs as mandated by ACA. Ambulatory Continuous Infusion Opportunity** (Oncology) *As of June 30, 2016 **Management estimates
Management Executing On Value-Creation
Strategy INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 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 share "Land Grab" Expanding into adjacent addressable markets to drive growth Investments into next generation systems and technologies to increase
customer retention Improving product utilization to increase return on investment Effective cash utilization through decreased borrowing rates Adjusted EBITDA Margins 2014 does NOT add-back the following charges: G&A expense on IT and Pain
Management initiatives of $0.7M, a write-off of pumps $0.4M, severance of $0.2M *TTM as of 6/30/16
Value-Creation Strategy INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST FOUR REVENUE STREAMS DRIVING CASH FLOWS
Four Revenue Streams to Drive Cash
Flows INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Patient-Based Rental (TPP) 72% of 2015 Sales A hospital/clinic provides an INFU pump to a patient to be utilized for at-home therapy InfuSystem bills patients insurance company for
payment Hospital-Home Care Based Rental (Direct) 14% of 2015 Sales A hospital/clinic rents an INFU pump on a short term basis or clients choose to always rent INFU bills hospital/ clinic a flat rental rate Service & Repair 4% of 2015 Sales
InfuSystem will service and repair pumps for OEMs, other secondary market infusion pump companies, and hospitals/clinics Rental Revenue 90% of 2015 Sales Product Sales 10% of 2015 Sales InfuSystem will refurbish pumps for sale to hospitals/clinics
Customer has option to sell back pre-owned pumps Ability to sell new pumps Disposables for new and used pumps
Revenue Growth - Rental and Sales
INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Product Sales $ Millions $ Millions Rental Revenues (Gross to Net Collected) *TTM as of 6/30/16
Net Collected Revenue INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Bad Debt as a Percent of Rental 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 High diversification of providers and payors No single healthcare provider represents more than 9% of Patient-Based Revenue (TPP)
Patient-Based Rental Payor Mix (FY2015 Cash Collections)
"Stickiness" Leads to High Revenue Predictability INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Strong value placed on hospital/clinic contracts and relationships due to strong "reorder/recurring" revenue component
InfuSystem provides patient-based pump rentals through ~1,750* customer/facility count (clinics/hospitals) with ~420* payor networks under contract Customer count has declined through market consolidation, with INFU on the winning side Oncology
clinics/hospitals that account for 98% of patient-based pump rentals in 2014 also rented a pump in 2015 Average customer tenure (weighted by number of pump rentals in 2015) is over 9 years Percent of Pump Rentals by Oncology Clinics that Reordered
in 2015 vs 2014 Growth in Oncology Customers and Payor Networks under Contract *As of June, 30, 2016
Value-Creation Takeaway INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST STRATEGIC ACQUISITIONS TO STRENGTHEN MARKET SHARE IN CORE ONCOLOGY BUSINESS
Strategic Acquisitions to Increase
Market Share INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 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 Expand market share with additional 106 new infusion clinics relationships for InfuSystem primarily throughout the Southeast Offer InfuConnect (EMR) solutions and product
portfolio: pole mounted infusion pumps and disposables, catheter care kits and chemo safety products (USP 800) Open new Southeast Service Center Enables same day service for equipment and supplies to much of the Southeast region In April 2016, the
Company announced it was acquiring the assets of InfusAID, LLC. Acquired inventory of approximately 400 pumps Expands market share with additional 18 infusion clinics "The right pump, the right place, and the right time. Working and patient
Kansas City Service Center Madison
Heights Service Center Future Northeast Service Center (est. 2017) Atlanta Service Center (2015) Los Angeles Area Service Center Houston Service Center (2014) Toronto Canada Service Center Faster Turnaround Times and Improved Utilization INNOVATION
| TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST InfuSystem Service Centers Reduced cost of air shipments Improved utilization of pump fleet Increased market share of "Same-Day" rental market ISO 9001 Certification and CHAP accredited
quality Annual pump recertification Maintenance & Warranty Ability to service smart pumps Hub and Spoke Model
Value-Creation Takeaway INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Expanding into adjacent addressable markets to drive growth
Expansion into At-Home Pain
Management Infusion Pump Market INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Pain relieving effects of a peripheral nerve block can be extended by using a continuous peripheral nerve block catheter, local anesthetic & an electronic
infusion pump Growing therapy in an estimated $700 million market 5.7 million orthopedic surgeries annually 50% are projected to be Continuous Peripheral Nerve Block Candidates Pain most common reason Americans access the health care system Leading
cause of disability Major contributor to health care costs. Per National Center for Health Statistics (2006), approximately 76.2 million, 1 in every 4 Americans suffered from pain that last longer than 24 hours
Value-Creation Takeaway INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST INVESTMENTS INTO NEXT GENERATION SYSTEMS AND TECHNOLOGIES TO INCREASE CUSTOMER RETENTION
InfuConnect: Enhancing Customer
Retention and Future Growth Driver (EMR) INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST EMR Integration - Simple as 1-2-3 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 Ambulatory Infusion Made Easy On Any Device, Auto loaded Fastest Implementation Manage Patients Monitor Inventory Sign Orders Order Supplies Patient Education and
InfuConnect: Life Cycle Management
INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST State of the Art Asset Tracking and Management Track Assets in Real Time Improve Recovery Rates Extend Asset Life Track From Any Device Fleet Management Made Easy Order Additional Pumps
Schedule Service & Repair Access Recertification Docs Online, Anytime
Pain Management and Reporting
INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Real-Time Pain Score Reporting Supporting High Patient Satisfaction Online, Anytime
Value-Creation Takeaway INNOVATION |
TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST FINANCIAL OVERVIEW
Total Revenue: Total vs Net
Collected INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST $ Millions Total Revenues (Gross to Net Collected) *TTM as of 6/30/16
Strong Gross and Adjusted EBITDA
Margins INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Gross Margins *2014 does NOT add-back the following charges: G&A expense on IT and Pain Management initiatives of $0.7M, a write-off of pumps $0.4M, severance of $0.2M Adjusted
EBITDA Margins See Appendix for Regulation G Reconciliation *TTM as of 6/30/16 **TTM as of 6/30/16
Free Cash Flow and Adjusted EBITDA
INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Free Cash Flow* See Appendix for Regulation G Reconciliation $ Millions $ Millions Adjusted EBITDA See Appendix for Regulation G Reconciliation *Free Cash Flow is presented under a new
definition as of 12/31/2015. Please see appendix for Regulation G reconciliation of Free Cash Flow. *2014 does NOT add-back the following charges: G&A expense on IT and Pain Management initiatives of $0.7M, a write-off of pumps $0.4M, severance
of $0.2M **TTM as of 6/30/16
Net Income and Diluted EPS
INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST Net Income $ Millions Earnings Per Share Fully Diluted Basis ($45) ($45.4) *Q1-Q4 2015 = Normalized EPS-see Appendix for Regulation G Reconciliation *FY2015 is Normalized Net Income - see
Appendix for Regulation G Reconciliation *TTM as of 6/30/1
Increased Borrowing Facility to
Expand Future Pump Inventory INNOVATION | TEAMWORK | INTEGRITY | FOCUS | PEOPLE FIRST 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 18% in 2012, 9.5% in 2013, 7.75% in 2014 New facility signed with Chase in March 2015 Unrestricted Liquidity* Medical Equipment in Service (at cost) Total Debt $ Millions $
Millions $ Millions *Cash and Equivalents + Undrawn Revolver **TTM as of 6/30/16 *TTM as of 6/30/16 *TTM as of 6/30/16
New $45 Million Credit Facility