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| 8-K - FORM 8-K - LIBERATOR MEDICAL HOLDINGS, INC. | v330932_8-k.htm |
Liberator Medical Reports Record Annual Net Revenues of $60.9 Million for Fiscal Year Ended September 30, 2012
The Company Reports Net Income of $2.5 Million for the Year
STUART, FL -- (MARKETWIRE) -- 12/24/12 -- Liberator Medical Holdings, Inc. (OTCBB: LBMH) announced net revenues for fiscal year 2012 of $60,943,000, an increase of $8,245,000, or 15.6%, compared with sales of $52,698,000 for fiscal year 2011. The increase in sales was primarily due to the Company's continued direct response advertising campaign to acquire new customers and its emphasis on customer service to maximize the reorder rates for its recurring customer base. Liberator's direct response advertising expenditure for fiscal year 2012 was $13,113,000, compared to $15,245,000 for fiscal year 2011. For the fourth quarter of fiscal 2012, the Company reported net revenues of $16,516,000, representing a 10.4% increase over third quarter 2012 net revenues of $14,961,000.
Net income for fiscal year 2012 increased by $2,242,000, or 866%, to $2,501,000, compared with fiscal year 2011 net income of $259,000. Net income for fiscal year 2011 included a $902,000 non-cash expense for the change in fair value of an embedded derivative, which was eliminated upon conversion of a convertible note during the first quarter of fiscal year 2011. The balance of the increase in net income was driven by increased sales volumes and improved operating margins during fiscal year 2012.
Financial Condition
The Company had cash of $3,326,000 at September 30, 2012, compared with $3,016,000 at September 30, 2011, an increase of $310,000. This increase in cash during fiscal year 2012 was primarily due to $1,000,000 of borrowings from its credit line facility, partially offset by $546,000 in net cash used in operating activities and $151,000 for purchases of property and equipment.
Cash used in operating activities in fiscal 2012 was $546,000, which represents an improvement of $3,947,000 compared with cash used in operating activities of $4,493,000 during fiscal year 2011. The improvement in operating cash flows during fiscal year 2012 was primarily driven by additional net income of $2,242,000, a reduction in direct response advertising spend of $2,132,000, partially offset by a decrease in changes in operating assets and liabilities of $449,000.
Mark Libratore, President and Chief Executive Officer, stated: "We are very proud of our financial performance during fiscal year 2012. We increased our sales by 15% over last year, reduced our customer acquisition costs, increased our operating margins, and improved our operating cash flows for 2012. We will continue to invest in new technology and implement process improvements during fiscal year 2013 that we believe will improve overall productivity and contribute to increased profitability, while providing excellent service to our growing customer base.
We expect to manage the levels of our direct response advertising spend to maximize profitability and cash flows for fiscal year 2013, which may result in slower top-line sales growth. Based on our financial results from fiscal year 2012, we expect to continue to improve operating margins and cash flows for fiscal year 2013."
Stay up-to-date with current events by visiting Liberator Medical's website at 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. Accredited by The Joint Commission, 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 |
| Consolidated Balance Sheets |
| As of September 30, 2012 and 2011 |
| (In thousands, except dollar per share amounts) |
| 2012 | 2011 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 3,326 | $ | 3,016 | ||||
| Accounts receivable, net of allowances of $5,044 and $4,177, respectively | 10,365 | 7,860 | ||||||
| Inventory, net of allowance for obsolete inventory of $310 and $144, respectively | 2,627 | 3,009 | ||||||
| Deferred taxes, current portion | 2,254 | 1,877 | ||||||
| Prepaid and other current assets | 287 | 333 | ||||||
| Total Current Assets | 18,859 | 16,095 | ||||||
| Property and equipment, net of accumulated depreciation of $2,888 and $2,186, respectively | 1,250 | 1,626 | ||||||
| Deferred advertising | 22,426 | 17,191 | ||||||
| Intangible assets, net of accumulated amortization of $91 and $25, respectively | 239 | 305 | ||||||
| Other assets | 88 | 163 | ||||||
| Total Assets | $ | 42,862 | $ | 35,380 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 6,537 | $ | 5,008 | ||||
| Accrued liabilities | 1,221 | 1,119 | ||||||
| Other current liabilities | 92 | 103 | ||||||
| Total Current Liabilities | 7,850 | 6,230 | ||||||
| Deferred tax liability | 5,421 | 3,347 | ||||||
| Credit line facility | 2,500 | 1,500 | ||||||
| Other long-term liabilities | 132 | 48 | ||||||
| Total Liabilities | 15,903 | 11,125 | ||||||
| Commitments and contingencies (see Note 13) | ||||||||
| Stockholders' Equity: | ||||||||
| Common stock, $.001 par value, 200,000 shares authorized, 48,232 and 48,135 shares issued, respectively; 48,143 and 48,046 shares outstanding at September 30, 2012 and 2011, respectively | 48 | 48 | ||||||
| Additional paid-in capital | 34,707 | 34,504 | ||||||
| Accumulated deficit | (7,746 | ) | (10,247 | ) | ||||
| Treasury stock, at cost; 89 shares at September 30, 2012 and 2011, respectively | (50 | ) | (50 | ) | ||||
| Total Stockholders' Equity | 26,959 | 24,255 | ||||||
| Total Liabilities and Stockholders' Equity | $ | 42,862 | $ | 35,380 | ||||
See accompanying notes to consolidated financial statements
| Liberator Medical Holdings, Inc. and Subsidiaries |
| Consolidated Statements of Operations |
| For the fiscal years ended September 30, 2012 and 2011 |
| (In thousands, except dollar per share amounts) |
| 2012 | 2011 | |||||||
| Net Sales | $ | 60,943 | $ | 52,698 | ||||
| Cost of Sales | 23,924 | 20,601 | ||||||
| Gross Profit | 37,019 | 32,097 | ||||||
| Operating Expenses: | ||||||||
| Payroll, taxes and benefits | 14,136 | 12,174 | ||||||
| Advertising | 8,099 | 8,206 | ||||||
| Bad debts | 4,664 | 3,746 | ||||||
| Depreciation and amortization | 794 | 730 | ||||||
| General and administrative | 5,019 | 4,644 | ||||||
| Total Operating Expenses | 32,712 | 29,500 | ||||||
| Income from Operations | 4,307 | 2,597 | ||||||
| Other Income (Expense) | ||||||||
| Gain on sale of assets | - | 2 | ||||||
| Interest expense | (75 | ) | (42 | ) | ||||
| Interest income | - | 5 | ||||||
| Change in fair value of derivative liabilities | - | (902 | ) | |||||
| Total Other Income (Expense) | (75 | ) | (937 | ) | ||||
| Income before Income Taxes | 4,232 | 1,660 | ||||||
| Provision for Income Taxes | 1,731 | 1,401 | ||||||
| Net Income | $ | 2,501 | $ | 259 | ||||
| Basic earnings per share: | ||||||||
| Weighted average shares outstanding | 48,097 | 47,869 | ||||||
| Earnings per share | $ | 0.05 | $ | 0.01 | ||||
| Diluted earnings per share: | ||||||||
| Weighted average shares outstanding | 52,266 | 53,613 | ||||||
| Earnings per share | $ | 0.05 | $ | 0.00 | ||||
See accompanying notes to consolidated financial statements
| Liberator Medical Holdings, Inc. and Subsidiaries |
| Consolidated Statements of Cash Flows |
| For the fiscal years ended September 30, 2012 and 2011 |
| (In thousands) |
| 2012 | 2011 | |||||||
| Cash flow from operating activities: | ||||||||
| Net income | $ | 2,501 | $ | 259 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 8,672 | 8,790 | ||||||
| Equity based compensation | 122 | 385 | ||||||
| Provision for doubtful accounts and contractual adjustments | 4,787 | 3,950 | ||||||
| Non-cash interest related to convertible notes payable | - | 21 | ||||||
| Change in fair value of derivative liabilities | - | 902 | ||||||
| Deferred income taxes | 1,697 | 1,340 | ||||||
| Reserve for inventory obsolescence | 166 | 35 | ||||||
| Gain on disposal of assets | - | (2 | ) | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (7,293 | ) | (5,065 | ) | ||||
| Deferred advertising | (13,113 | ) | (15,245 | ) | ||||
| Inventory | 216 | (1,025 | ) | |||||
| Other assets | 143 | 49 | ||||||
| Accounts payable | 1,529 | 1,182 | ||||||
| Accrued expenses | 116 | 13 | ||||||
| Other liabilities | (89 | ) | (83 | ) | ||||
| Net Cash Flows Used in Operating Activities | (546 | ) | (4,494 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment and other | (151 | ) | (369 | ) | ||||
| Acquisition of SGV Medical Supplies (see Note 10) | - | (466 | ) | |||||
| Proceeds from the sale of assets | - | 3 | ||||||
| Net Cash Flows Used in Investing Activities | (151 | ) | (832 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from credit line facility | 1,000 | 1,500 | ||||||
| Costs associated with credit line facility | (21 | ) | (51 | ) | ||||
| Proceeds from employee stock purchase plan | 67 | 86 | ||||||
| Payments of debt and capital lease obligations | (39 | ) | (621 | ) | ||||
| Net Cash Flows Provided by Financing Activities | 1,007 | 914 | ||||||
| Net increase (decrease) in cash | 310 | (4,412 | ) | |||||
| Cash at beginning of period | 3,016 | 7,428 | ||||||
| Cash at end of period | $ | 3,326 | $ | 3,016 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 73 | $ | 56 | ||||
| Cash refunded for income taxes | - | (8 | ) | |||||
| Supplemental schedule of non-cash investing and financing activities: | ||||||||
| Capital expenditures funded by capital lease borrowings | 202 | - | ||||||
| Common stock issued for conversion of debt | - | 5,100 | ||||||
See accompanying notes to 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 filed with the Securities and Exchange Commission.
CONTACT:
Individual Investor Relations Contact
Gerald Kieft
Wall Street Resources, Inc.
772-219-7525
IR@WSRcommunications.com
http://wsrcommunications.ir.stockpr.com/liberatormedical
Institutional Investor Contact:
Lyn Davis
Littlebanc Advisors, LLC
561-948-3005
ld@littlebanc.com
www.littlebanc.com