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| 8-K - CURRENT REPORT - LIBERATOR MEDICAL HOLDINGS, INC. | v244729_8k.htm |
Liberator Medical Reports Record Annual Net Revenues of $52.7 Million for Fiscal Year Ended September 30, 2011
STUART, Fla., Jan. 5, 2012 (GLOBE NEWSWIRE) -- Liberator Medical Holdings, Inc. (OTCBB:LBMH) announced record net revenues of $52.7 million for the fiscal year ended September 30, 2011, an increase of $11.8 million, or 28.8%, compared with fiscal year ended September 30, 2010, net revenues of $40.9 million. For the fourth fiscal quarter ended September 30, 2011, the Company reported net revenues of $14.5 million, representing an increase of $3.0 million, or 26%, over net revenues of $11.5 million for the fiscal quarter ended September 30, 2010, and an increase of $1.2 million, or 9.26%, over net revenues of $13.3 million for the quarter ended June 30, 2011. The increase in sales was primarily due to the Company's continued emphasis on its direct response advertising campaign to acquire new customers and on customer service to retain its recurring customer base.
Liberator's net income decreased from $2.6 million for fiscal year 2010 to $0.3 million for fiscal year 2011, primarily as a result of increases in cost of sales and advertising expense as a percentage of sales, an increase in non-cash charges attributable to embedded derivative liabilities, and an increase in the provision for income taxes. Although changes in product mix resulted in a 4% increase in cost of goods sold as a percentage of sales in fiscal year 2011, the Company anticipates negotiating lower vendor pricing for certain products due to higher sales volumes, which should mitigate the increase in its cost of goods sold. The Company's 2011 advertising spend, in the second fiscal quarter, did not result in the lead conversion rate expected. The Company adjusted its advertising spend in the third and fourth quarters, resulting in sales growth. The Company plans to continue the adjusted advertising spend and anticipates continued sales growth in fiscal year 2012. In the second half of fiscal year 2011, the Company implemented new technologies to provide more efficient and immediate conversion of leads, and improved new customer processing. The non-cash charges resulted from increases in the fair value of embedded derivatives included in notes that were converted into shares of the Company's common stock. The Company has no additional exposure to changes in the fair value of embedded derivative liabilities due to the conversion of the convertible notes. The Company's provision for income taxes is predominantly related to deferred income tax expenses, which are not currently payable.
Mr. Libratore, CEO, stated: "We have experienced substantial growth over the past three fiscal years despite the downturn in the U.S. economy. We have increased sales for fourteen consecutive quarters. The outlook for demand for our products and services continues to be favorable because of a steady increase in newly-diagnosed patients requiring the medical supplies that we provide due to the aging of the U.S. population. Benefitting the Company further, in November 2011 the Center for Medicare & Medicaid Services ("CMS") updated the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies ("DME") fee schedules for calendar year 2012 that will provide us with a 2.4% increase in Medicare reimbursement rates on DME supplies we provide to our Medicare customers. We have a strong balance sheet, with $3.0 million of cash and $5.8 million available from our credit line facility as of September 30, 2011."
The following paragraphs highlight Liberator Medical's achievements in fiscal year 2011
The Company's gross profit for fiscal year 2011 increased by $5,527,000, or 20.8%, to $32,097,000, compared with fiscal year 2010, primarily as a result of increased sales volume in fiscal year 2011.
Liberator's direct response advertising expenditures for fiscal year 2011 increased by $4,4437,000, or 41%, to $15,245,000, compared with advertising expenditures of $10,808,000 in the fiscal year ended September 30, 2010.
Payroll, taxes and benefits increased by $2,201,000, or 22.1%, to $12,174,000 for fiscal year 2011 compared to fiscal year 2010, as the Company increased the number of its employees to support the Company's increased growth. Liberator has chosen to invest in recruiting, hiring, and training additional staff ahead of its advertising schedule, which helps the Company maintain the quality of its customer service. As of September 30, 2011, Liberator had 307 active employees compared to 214 at September 30, 2010.
Interest expense decreased by $1,214,000 to $42,000 for fiscal year 2011 compared to fiscal year 2010. The decrease in interest expense was due to reduced levels of debt during fiscal year 2011 as a result of the conversion of $6,452,000 of notes into shares of the Company's common stock and $1,315,000 of loan principal payments.
On May 13, 2011, the Company acquired the ostomy supply customers of SGV Medical Supplies. These customers generated approximately $790,000 of sales from the date of acquisition through September 30, 2011.
Stay up-to-date with current events by visiting Liberator Medical's website at http:///www.liberatormedical.com or by joining the Company's E-Mail Alert List. Join by clicking the following link www.LBMH-IR.com
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.
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Liberator Medical Holdings, Inc. and Subsidiaries
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Consolidated Balance Sheets
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As of September 30, 2011 and 2010
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(In thousands, except dollar per share amounts)
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2011
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2010
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Assets
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Current Assets:
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Cash
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$ | 3,016 | $ | 7,428 | ||||
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Accounts receivable, net of allowance of $4,177 and $3,312, respectively
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7,860 | 6,744 | ||||||
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Inventory, net of allowance for obsolete inventory of $144 and $110, respectively
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3,009 | 1,985 | ||||||
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Deferred taxes, current portion
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1,877 | 1,696 | ||||||
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Prepaid and other current assets
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333 | 355 | ||||||
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Total Current Assets
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16,095 | 18,208 | ||||||
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Property and equipment, net of accumulated depreciation of $2,186 and $1,527, respectively
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1,626 | 1,862 | ||||||
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Deferred advertising
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17,191 | 10,006 | ||||||
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Intangible assets, net of accumulated amortization of $25
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305 | -- | ||||||
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Other assets
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163 | 139 | ||||||
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Total Assets
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$ | 35,380 | $ | 30,215 | ||||
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Liabilities and Stockholders' Equity
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Current Liabilities:
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Accounts payable
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$ | 5,008 | $ | 3,826 | ||||
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Accrued liabilities
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1,119 | 1,077 | ||||||
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Derivative liabilities
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-- | 1,698 | ||||||
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Stockholder loan
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-- | 565 | ||||||
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Notes payable, net of unamortized discount of $21
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-- | 2,516 | ||||||
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Other current liabilities
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103 | 146 | ||||||
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Total Current Liabilities
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6,230 | 9,828 | ||||||
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Deferred tax liability
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3,347 | 1,826 | ||||||
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Credit line facility
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1,500 | -- | ||||||
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Other long-term liabilities
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48 | 145 | ||||||
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Total Liabilities
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11,125 | 11,799 | ||||||
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Commitments and contingencies (see Note 13)
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Stockholders' Equity:
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Common stock, $.001 par value, 200,000 shares authorized, 48,135 and 44,706 shares issued, respectively; 48,046 and 44,617 shares outstanding at September 30, 2011 and 2010, respectively
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48 | 45 | ||||||
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Additional paid-in capital
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34,504 | 28,927 | ||||||
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Accumulated deficit
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(10,247 | ) | (10,506 | ) | ||||
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Treasury stock, at cost; 89 shares at September 30, 2011 and 2010, respectively
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(50 | ) | (50 | ) | ||||
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Total Stockholders' Equity
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24,255 | 18,416 | ||||||
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Total Liabilities and Stockholders' Equity
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$ | 35,380 | $ | 30,215 | ||||
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Liberator Medical Holdings, Inc. and Subsidiaries
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Consolidated Statements of Operations
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For the fiscal years ended September 30, 2011 and 2010
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(In thousands, except dollar per share amounts)
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2011
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2010
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Net Sales
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$ | 52,698 | $ | 40,919 | ||||
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Cost of Sales
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20,601 | 14,349 | ||||||
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Gross Profit
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32,097 | 26,570 | ||||||
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Operating Expenses:
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Payroll, taxes and benefits
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12,174 | 9,973 | ||||||
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Advertising
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8,206 | 4,629 | ||||||
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Bad debts
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3,746 | 2,653 | ||||||
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Depreciation and amortization
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730 | 593 | ||||||
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General and administrative
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4,644 | 4,097 | ||||||
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Total Operating Expenses
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29,500 | 21,945 | ||||||
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Income from Operations
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2,597 | 4,625 | ||||||
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Other Income (Expense)
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Gain (Loss) on sale of assets
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2 | (2 | ) | |||||
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Interest expense
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(42 | ) | (1,256 | ) | ||||
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Interest income
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5 | 22 | ||||||
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Change in fair value of derivative liabilities
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(902 | ) | (691 | ) | ||||
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Total Other Income (Expense)
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(937 | ) | (1,927 | ) | ||||
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Income before Income Taxes
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1,660 | 2,698 | ||||||
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Provision for Income Taxes
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1,401 | 98 | ||||||
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Net Income
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$ | 259 | $ | 2,600 | ||||
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Basic earnings per share:
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Weighted average shares outstanding
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47,869 | 38,493 | ||||||
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Earnings per share
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$ | 0.01 | $ | 0.07 | ||||
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Diluted earnings per share:
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Weighted average shares outstanding
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53,613 | 52,595 | ||||||
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Earnings per share
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$ | 0.00 | $ | 0.05 | ||||
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Liberator Medical Holdings, Inc. and Subsidiaries
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Consolidated Statements of Cash Flows
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For the fiscal years ended September 30, 2011 and 2010
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(In thousands)
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2011
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2010
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Cash flow from operating activities:
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Net Income
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$ | 259 | $ | 2,600 | ||||
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Adjustments to reconcile net income to net cash used in operating activities:
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Depreciation and amortization
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8,790 | 5,150 | ||||||
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Equity based compensation
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385 | 388 | ||||||
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Provision for doubtful accounts and contractual adjustments
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3,950 | 3,096 | ||||||
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Non-cash interest related to convertible notes payable
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21 | 1,003 | ||||||
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Change in fair value of derivative liabilities
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902 | 691 | ||||||
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Deferred income taxes
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1,340 | 130 | ||||||
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Amortization of non-cash debt issuance costs
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-- | 26 | ||||||
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Reserve for inventory obsolescence
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35 | -- | ||||||
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Loss (Gain) on disposal of assets
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(2 | ) | 2 | |||||
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Changes in operating assets and liabilities:
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Accounts receivable
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(5,065 | ) | (5,988 | ) | ||||
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Deferred advertising
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(15,245 | ) | (10,808 | ) | ||||
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Inventory
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(1,025 | ) | (692 | ) | ||||
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Other assets
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49 | 70 | ||||||
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Accounts payable
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1,182 | 1,736 | ||||||
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Accrued expenses
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13 | 266 | ||||||
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Other liabilities
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(83 | ) | (6 | ) | ||||
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Net Cash Flows Used in Operating Activities
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(4,494 | ) | (2,336 | ) | ||||
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Cash flows from investing activities
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Purchase of property and equipment and other
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(369 | ) | (1,812 | ) | ||||
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Acquisition of SGV Medical Supplies (see Note 10)
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(466 | ) | -- | |||||
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Proceeds from the sale of assets
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3 | 5 | ||||||
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Purchase of certificates of deposit
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-- | (562 | ) | |||||
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Proceeds from the sale of certificates of deposit
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-- | 1,062 | ||||||
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Net Cash Flows Used in Investing Activities
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(832 | ) | (1,307 | ) | ||||
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Cash flows from financing activities
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Proceeds from the sale of common stock
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-- | 7,000 | ||||||
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Costs associated with the sale of common stock
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-- | (407 | ) | |||||
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Proceeds from the exercise of warrants
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-- | 1,592 | ||||||
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Proceeds from credit line facility
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1,500 | -- | ||||||
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Costs associated with credit line facility
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(51 | ) | -- | |||||
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Proceeds from employee stock purchase plan
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86 | 128 | ||||||
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Purchase of treasury stock
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-- | (9 | ) | |||||
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Payments of debt and capital lease obligations
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(621 | ) | (1,031 | ) | ||||
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Net Cash Flows Provided by Financing Activities
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914 | 7,273 | ||||||
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Net increase (decrease) in cash
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(4,412 | ) | 3,630 | |||||
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Cash at beginning of period
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7,428 | 3,798 | ||||||
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Cash at end of period
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$ | 3,016 | $ | 7,428 | ||||
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Supplemental disclosure of cash flow information:
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Cash paid for interest
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$ | 56 | $ | 337 | ||||
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Cash paid (refunded) for income taxes
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(8 | ) | 13 | |||||
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Supplemental schedule of non-cash investing and financing activities:
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Common stock issued for interest expense
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-- | 45 | ||||||
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Common stock issued for conversion of debt
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5,100 | 8,913 | ||||||
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, 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 "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2011, and our other filings with the Securities and Exchange Commission. We assume no obligation to update the information contained in this news release.
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CONTACT:
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Individual Investor Relations Contact
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Gerald Kieft
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Wall Street Resources, Inc.
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772-219-7525
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LiberatorIR@wallstreetresources.net
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http://www.wallstreetresources.net
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Institutional Investor Contact:
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Lyn Davis
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Littlebanc Advisors, LLC
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561-948-3005
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ld@littlebanc.com
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www.littlebanc.com
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Source: Liberator Medical Holdings, Inc.
Released January 5, 2012