STUART, Fla., Aug. 16, 2011 (GLOBE NEWSWIRE) -- Liberator Medical Holdings, Inc. (OTCBB:LBMH) today announced the financial results of its fiscal third quarter ended June 30, 2011.
Sales for the three months ended June 30, 2011, increased by $2,690,000, or 25.3%, to $13,309,000, compared with sales of $10,619,000 for the three months ended June 30, 2010. Sales for the nine months ended June 30, 2011, increased by $8,728,000, or 29.7%, to $38,156,000, compared with sales of $29,428,000 for the nine months ended June 30, 2010. 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 dedication to customer service to retain its recurring customer base.
Gross profit for the three months ended June 30, 2011, increased by $1,225,000, or 17.6%, to $8,167,000, compared with gross profit of $6,942,000 for the three months ended June 30, 2010. For the nine months ended June 30, 2011, gross profit increased by $4,890,000, or 25.6%, to $24,006,000, compared with gross profit of $19,116,000 for the nine months ended June 30, 2010. The increase was attributed to increased sales volume for the three and nine months ended June 30, 2011, compared to the three and nine months ended June 30, 2010.
Income from operations for the three months ended June 30, 2011, decreased by $473,000, or 50.2%, to $469,000, compared to the three months ended June 30, 2010. For the nine months ended June 30, 2011, income from operations decreased by $99,000, or 4.0%, to $2,362,000, compared to $2,461,000 for the nine months ended June 30, 2010. The decrease in operating income was primarily due to increased ostomy supply sales, which are at lower gross profit margins, increased advertising expenses to acquire new customers, and increased general and administrative expenses related to the implementation of new software systems during the nine months ended June 30, 2011.
Interest expense decreased by $286,000 to $3,000 and $1,070,000 to $35,000, respectively, for the three and nine months ended June 30, 2011, compared to the three and nine months ended June 30, 2010. The decrease in interest expense was due to reduced levels of debt during the nine months ended June 30, 2011, as a result of the conversion of $6,452,000 of notes into shares of common stock and $1,315,000 of principal payments of shareholder loans since December 31, 2009.
The Company had cash of $2,452,000 at June 30, 2011, compared to cash of $7,428,000 at September 30, 2010, a decrease of $4,976,000. The decrease in cash for the nine months ended June 30, 2011, is primarily due to $4,107,000 of cash used in operating activities, payments of $614,000 for debt, and $466,000 of cash used for the acquisition of SGV Medical Supplies. As of June 30, 2011, the Company had approximately $6,400,000 available from its credit line facility.
Mark Libratore, the Company's President and CEO, commented, "The Company has experienced significant growth over the past four years. While our operating income decreased from last year, we have substantially increased our infrastructure and implemented additional technology and resources to support future sales growth at reduced levels of incremental costs. Our advertising efforts during the third quarter generated customer order leads at lower costs per lead compared to the first two quarters of fiscal year 2011. We expect to acquire new customers at reduced levels of costs during the fourth quarter and our revenues to continue to increase due to our advertising campaign and the retention of our existing customer base."
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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 supplies, catheters, ostomy supplies and mastectomy fashions. 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, governmental regulatory changes affecting 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 other factors listed under "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended September 30, 2010, 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 | ||
| As of June 30, 2011 (unaudited) and September 30, 2010 | ||
| (In thousands, except dollar per share amounts) | ||
|
June 30, 2011 |
September 30, 2010 |
|
| Assets | ||
| Current Assets: | ||
| Cash | $ 2,452 | $ 7,428 |
| Accounts receivable, net of allowances of $4,111 and $3,312, respectively | 7,965 | 6,744 |
| Inventory, net of allowance for obsolete inventory of $137 and $110, respectively | 2,912 | 1,985 |
| Deferred taxes, current portion | 1,775 | 1,696 |
| Prepaid and other current assets | 366 | 355 |
| Total Current Assets | 15,470 | 18,208 |
| Property and equipment, net of accumulated depreciation of $1,997 and $1,527, respectively | 1,708 | 1,862 |
| Deferred advertising | 16,841 | 10,006 |
| Intangible assets, net of accumulated amortization of $12 | 470 | — |
| Other assets | 215 | 139 |
| Total Assets | $ 34,704 | $ 30,215 |
| Liabilities and Stockholders' Equity | ||
| Current Liabilities: | ||
| Accounts payable | $ 5,493 | $ 3,826 |
| Accrued liabilities | 1,145 | 1,077 |
| Credit line facility | 500 | — |
| Derivative liabilities | — | 1,698 |
| Stockholder loans | — | 565 |
| Notes payable, net of unamortized discount of $143 and $21, respectively | 107 | 2,516 |
| Other current liabilities | 124 | 146 |
| Total Current Liabilities | 7,369 | 9,828 |
| Deferred tax liability | 3,006 | 1,826 |
| Other long-term liabilities | 59 | 145 |
| Total Liabilities | 10,434 | 11,799 |
| Stockholders' Equity: | ||
| Common stock, $.001 par value, 200,000 shares authorized, 48,136 and 44,707 shares issued, respectively; 48,046 and 44,617 shares outstanding at June 30, 2011, and September 30, 2010, respectively | 48 | 45 |
| Additional paid-in capital | 34,447 | 28,927 |
| Accumulated deficit | (10,175) | (10,506) |
| Treasury stock, at cost; 89 shares at June 30, 2011, and September 30, 2010 | (50) | (50) |
| Total Stockholders' Equity | 24,270 | 18,416 |
| Total Liabilities and Stockholders' Equity | $ 34,704 | $ 30,215 |
| Liberator Medical Holdings, Inc. and Subsidiaries | ||||
| Condensed Consolidated Statements of Operations | ||||
| For the three and nine months ended June 30, 2011 and 2010 | ||||
| (Unaudited) | ||||
| (in thousands, except per share amounts) | ||||
|
Three Months Ended June 30, |
Nine Months Ended June 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Sales | $ 13,309 | $ 10,619 | $ 38,156 | $ 29,428 |
| Cost of Sales | 5,142 | 3,677 | 14,150 | 10,312 |
| Gross Profit | 8,167 | 6,942 | 24,006 | 19,116 |
| Operating Expenses | ||||
| Payroll, taxes and benefits | 3,072 | 2,569 | 8,843 | 7,357 |
| Advertising | 2,132 | 1,336 | 6,052 | 3,255 |
| Bad debts | 1,098 | 1,020 | 2,867 | 2,603 |
| Depreciation | 191 | 179 | 528 | 449 |
| General and administrative | 1,205 | 896 | 3,354 | 2,991 |
| Total Operating Expenses | 7,698 | 6,000 | 21,644 | 16,655 |
| Income from Operations | 469 | 942 | 2,362 | 2,461 |
| Other Income (Expense) | ||||
| Interest expense | (3) | (289) | (35) | (1,105) |
| Change in fair value of derivative liabilities | — | 3,697 | (902) | (1,460) |
| Gain (Loss) on disposal of assets | — | — | 2 | (2) |
| Interest income | 1 | 8 | 5 | 16 |
| Total Other Income (Expense) | (2) | 3,416 | (930) | (2,551) |
| Income (Loss) before Income Taxes | 467 | 4,358 | 1,432 | (90) |
| Provision for (Benefit from) Income Taxes | 329 | 413 | 1,101 | (599) |
| Net Income | $ 138 | $ 3,945 | $ 331 | $ 509 |
| Basic earnings per share: | ||||
| Weighted average shares outstanding | 48,018 | 41,569 | 47,809 | 36,438 |
| Earnings per share | $ 0.00 | $ 0.09 | $ 0.01 | $ 0.01 |
| Diluted earnings per share: | ||||
| Weighted average shares outstanding | 54,175 | 54,797 | 53,751 | 44,809 |
| Earnings per share | $ 0.00 | $ 0.07 | $ 0.01 | $ 0.01 |
| Liberator Medical Holdings, Inc. and Subsidiaries | ||
| Condensed Consolidated Statements of Cash Flows | ||
| For the nine months ended June 30, 2011 and 2010 | ||
| (Unaudited) | ||
| (in thousands) | ||
|
Nine Months Ended June 30, |
||
| 2011 | 2010 | |
| Cash flow from operating activities: | ||
| Net Income | $ 331 | $ 509 |
| Adjustments to reconcile net income to net cash used in operating activities: | ||
| Depreciation and amortization | 6,458 | 3,670 |
| Change in fair value of derivative liabilities | 902 | 1,460 |
| Equity based compensation | 328 | 303 |
| Provision for doubtful accounts and sales returns and adjustments | 3,059 | 2,759 |
| Non-cash interest related to convertible notes payable | 21 | 886 |
| Deferred income taxes | 1,101 | (566) |
| Amortization of non-cash debt issuance costs | — | 23 |
| Reserve for inventory obsolescence | 28 | — |
| Loss (Gain) on disposal of assets | (2) | 2 |
| Changes in operating assets and liabilities: | ||
| Accounts receivable | (4,279) | (5,420) |
| Deferred advertising | (12,765) | (7,988) |
| Inventory | (922) | (1,135) |
| Other assets | (36) | (320) |
| Accounts payable | 1,667 | 3,516 |
| Accrued liabilities | 60 | (51) |
| Other liabilities | (58) | (3) |
| Net Cash Flow Used in Operating Activities | (4,107) | (2,355) |
| Cash flow from investing activities: | ||
| Purchase of property and equipment and other | (306) | (1,531) |
| Acquisition of SGV Medical Supplies (see Note 3) | (466) | — |
| Proceeds from the sale of assets | 3 | 5 |
| Purchase of certificates of deposit | — | (559) |
| Net Cash Flow Used in Investing Activities | (769) | (2,085) |
| Cash flow from financing activities: | ||
| Proceeds from the sale of common stock | — | 7,000 |
| Costs associated with the sale of common stock | — | (407) |
| Proceeds from the exercise of warrants | — | 1,556 |
| Proceeds from employee stock purchase plan | 64 | 102 |
| Proceeds from credit line facility | 500 | — |
| Costs associated with new credit line facility | (51) | — |
| Purchase of treasury stock | — | (9) |
| Payments of debt and capital lease obligations | (614) | (711) |
| Net Cash Flow Provided by (Used in) Financing Activities | (100) | 7,531 |
| Net increase (decrease) in cash | (4,976) | 3,091 |
| Cash at beginning of period | 7,428 | 3,798 |
| Cash at end of period | $ 2,452 | $ 6,889 |
| Supplemental disclosure of cash flow information: | ||
| Cash paid for interest | $ 51 | $ 323 |
| Cash paid for income taxes | $ 5 | $ 20 |
| Supplemental schedule of non-cash investing and financing activities: | ||
| Common stock issued for interest expense | — | $ 45 |
| Common stock issued for conversion of debt | $ 5,100 | $ 8,914 |
| Promissory note issued for acquisition of SGV Medical Supplies | $ 107 | — |