SOURCE: Liberator Medical Holdings, Inc.

December 18, 2009 07:55 ET

Liberator Medical Reports Record Annual Net Revenues of $25.8 Million for Fiscal Year Ended September 30, 2009

Fourth Quarter Revenue Was $7.7 Million, Equating to a Run Rate of $30.4 Million

STUART, FL--(Marketwire - December 18, 2009) - Liberator Medical Holdings, Inc. (OTCBB: LBMH) announced net revenues for fiscal year 2009 of $25,818,000, representing an increase of $16,268,000, or 170.3%, compared with fiscal year 2008. The increase in sales occurred in the mail order segment of its business. The increase was due to a substantial direct-response advertising campaign to obtain new mail order customers.

The Company reported gross profit for fiscal year 2009 of $16,768,000, representing an increase of $10,657,000, or 174.4%, compared with fiscal year 2008. As a percentage of sales, gross profit improved by 0.9% to 64.9% of sales for fiscal year 2009 compared to 64.0% of sales for fiscal year 2008. The increase in profit margins is primarily the result of vendor price reductions and/or discounts due to increased sales volumes.

The Company reported net income of $2,222,000 ($0.07 per share) for the fiscal year ended September 30, 2009, an increase of $3,531,000 compared to a net loss of $1,309,000 for the fiscal year ended September 30, 2008. During fiscal year 2009, cash provided by operating activities was $1,712,000.

For the fourth fiscal quarter 2009, the Company reported net revenues of $7,698,511, representing an increase of $3,447,670, or 81%, over fourth fiscal quarter 2008 net revenues of $4,250,841. During the fiscal fourth quarter, the Company reported net income of $1.087 million ($0.03 per share), compared to net income of $133,000 ($0.01 per share) for the fiscal fourth quarter 2008, an increase of $954,000, or 717%.

The Company invested $4,191,000 in direct-response advertising during fiscal year 2009, representing an increase of $2,624,000, or 167.5%, compared with fiscal year 2008. The Company believes that this investment in advertising was the driving force that helped catapult its year-over-year net revenue growth.

As of September 30, 2009, the Company had cash of $3,798,000, an increase of $2,625,000 compared to cash of $1,173,000 at September 30, 2008. This increase in cash in 2009 is primarily due to net proceeds of $2,177,000 from a long-term convertible debt offering in October 2008 and $1,712,000 generated from operating activities during fiscal year 2009, partially offset by cash used to purchase a $500,000 certificate of deposit as security for a new credit line, $441,000 for purchases of property and equipment, and payments of $316,000 on debt and capital lease obligations.

Mr. Libratore, CEO, stated: "The Company has experienced tremendous growth over the past two years and, as a result, five consecutive profitable quarters while generating positive operating cash flows during fiscal year 2009. We believe we have built an infrastructure and business model that it is capable of generating a substantially higher sales volume at reduced levels of incremental cost. In an effort to continue our growth, we plan on accelerating our advertising efforts over the next twelve months to attract new customers and expand our operations to service our new and existing customers. The outlook for demand for our products and services is favorable, as there should be an increase in newly-diagnosed patients requiring the medical supplies that we provide. We expect our revenues to increase significantly over the next twelve months due to our advertising and marketing programs."

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. An Exemplary Provider™ 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, 2008 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
                       Consolidated Balance Sheets
                    As of September 30, 2009 and 2008
            (In thousands, except share and per share amounts)

                                                      2009          2008
                                                   ---------     ---------
                      Assets
Current Assets
Cash                                               $   3,798     $   1,173
Restricted cash                                          500             -
Accounts receivable, net of allowance
 for doubtful accounts of $2,327 and
 $1,056, respectively                                  3,850         2,405
Prepaid expenses                                          59           321
Inventory, net of allowance for
 obsolete inventory of $110 and
 $50, respectively                                       902           786
Deferred advertising, current portion                  2,016           770
Debt issuance costs, current portion                     347           316
Other                                                     77             2
                                                   ---------     ---------
Total Current Assets                                  11,549         5,773
                                                   ---------     ---------

Property and Equipment
Property and Equipment, net of
 accumulated depreciation of
 $1,021 and $715, respectively                         1,041           816

Other Assets
Deferred advertising,
 net of current portion                                1,739           660
Debt issuance costs,
 net of current portion                                    7           177
Deposits                                                 123           100
                                                   ---------     ---------
Total Other Assets                                     1,869           937
                                                   ---------     ---------
Total Assets                                       $  14,459     $   7,526
                                                   =========     =========


       Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable                                   $   2,089     $     900
Accrued liabilities                                      716           290
Stockholder loan                                       1,515         1,665
Convertible notes payable, net of
 unamortized discount of $292 and
 $57, respectively                                     3,893           772
Capital lease obligations,
 current portion                                          80            51
Deferred rent liability,
 current portion                                          60            48
                                                   ---------     ---------
Total Current Liabilities                              8,353         3,726
                                                   ---------     ---------

Long-Term Liabilities
Convertible notes payable, net of
 unamortized discount of $90 and
 $749, respectively                                    2,447         2,789
Capital lease obligations, net of
 current portion                                          70            82
Deferred rent liability, net of
 current portion                                         165           214
                                                   ---------     ---------
Total Long-Term Liabilities                            2,682         3,085
                                                   ---------     ---------
Total Liabilities                                     11,035         6,811
                                                   ---------     ---------

Stockholders' Equity
Common stock, $.001 par value,
 200,000,000 shares authorized,
 32,462,311 and 32,050,366 shares
 issued at September 30, 2009 and
 2008, respectively                                       32            32
Additional paid-in capital                            11,705        11,177
Accumulated deficit                                   (8,272)      (10,494)
                                                   ---------     ---------
                                                       3,465           715
Less: Treasury stock, at cost
 (85,600 shares)                                         (41)            -
                                                   ---------     ---------
Total Stockholders' Equity                             3,424           715
                                                   ---------     ---------
Total Liabilities and
 Stockholders' Equity                              $  14,459     $   7,526
                                                   =========     =========




            Liberator Medical Holdings, Inc. and Subsidiaries
                  Consolidated Statements of Operations
             For the years ended September 30, 2009 and 2008
             and for the nine months ended September 30, 2007
                 (In thousands, except per share amounts)


                                        2009          2008          2007
                                     ---------     ---------     ---------
Sales                                $  25,818     $   9,550     $   2,250

Cost of Sales                            9,050         3,439           951

                                     ---------     ---------     ---------
Gross Profit                            16,768         6,111         1,299
                                     ---------     ---------     ---------

Operating Expenses
Payroll, taxes and benefits              5,406         2,685         1,365
Advertising                              2,042           470           134
Bad debts                                2,488         1,042           348
Depreciation                               306           213           138
General and administrative               3,237         2,502         1,170
                                     ---------     ---------     ---------
Total Operating Expenses                13,479         6,912         3,155
                                     ---------     ---------     ---------

Income (Loss) from Operations            3,289          (801)       (1,856)
                                     ---------     ---------     ---------

Other Income (Expense)
Forgiveness of debt                          -             -           108
Loss on sale of assets                       -             -            (3)
Interest Expense                        (1,054)         (520)         (217)
Interest Income                             19            12             -
                                     ---------     ---------     ---------
Total Other Income (Expense)            (1,035)         (508)         (112)
                                     ---------     ---------     ---------

Income (Loss) before Income Taxes        2,254        (1,309)       (1,968)

Provision for Income Taxes                  32             -             -
                                     ---------     ---------     ---------

Net Income (Loss)                    $   2,222     $  (1,309)    $  (1,968)
                                     =========     =========     =========

Basic earnings (loss) per share:
Weighted average shares
 outstanding                            32,128        31,768        27,265
Earnings (loss) per share            $    0.07     $   (0.04)    $   (0.07)

Diluted earnings (loss)
 per share:
Weighted average shares
 outstanding                            43,620        31,768        27,265
Earnings (loss) per share            $    0.06     $   (0.04)    $   (0.07)



            Liberator Medical Holdings, Inc. and Subsidiaries
                  Consolidated Statements of Cash Flows
             For the years ended September 30, 2009 and 2008
             and for the nine months ended September 30, 2007
                             (In thousands)


                                        2009          2008          2007
                                     ---------     ---------     ---------
Cash flow from operating
 activities
Net Income (Loss)                    $   2,222     $  (1,309)    $  (1,968)

Adjustments to reconcile net
 income (loss) to net cash
 provide by (used in) operating
 activities:
Depreciation and amortization            2,172           663           251
Equity based compensation                  420           739           264
Bad debt expense                         2,488         1,042           348
Non-cash interest related to
 convertible notes payable                 701           233             -
Amortization of non-cash debt
 issuance costs                             37            12             -
Inventory reserve                           60             -            50
Loss on disposal of assets                   -             -             3
Changes in operating assets
 and liabilities:
Accounts receivable                     (3,933)       (2,963)          213
Prepaid expenses and other
 current assets                           (119)           23           (64)
Inventory                                 (176)         (487)            9
Accounts payable                         1,189           501           (97)
Accrued expenses                           433           157            75
Deferred rent                              (37)          (42)           10
Deferred advertising                    (4,191)       (1,567)         (224)
Debt issuance costs                        446           128             -
                                     ---------     ---------     ---------
Net Cash Flows Provided by
 (Used in) Operating Activities          1,712        (2,870)       (1,130)
                                     ---------     ---------     ---------

Cash flows from investing
 activities
Purchase of property and
 equipment                                (441)         (222)          (18)
Purchase of certificates
 of deposit                               (500)            -             -
                                     ---------     ---------     ---------
Net Cash Flows Used in
 Investing Activities                     (941)         (222)          (18)
                                     ---------     ---------     ---------


Cash flows from financing
 activities
Proceeds from sale of stock                  -           762           641
Broker commissions                           -          (101)         (180)
Proceeds from the exercise
 of warrants                                10             -             -
Proceeds from convertible notes
 payable and long-term debt              2,500         4,098           877
Debt issuance costs                       (326)         (577)            -
Proceeds from employee stock
 purchase plan                              27             -             -
Purchase of treasury stock                 (41)            -             -
Payments of long-term debt and
 capital lease obligations                (316)          (94)         (137)
                                     ---------     ---------     ---------
Net Cash Flows Provided by
 Financing Activities                    1,854         4,088         1,201
                                     ---------     ---------     ---------

Net increase in cash                     2,625           996            53

Cash at beginning of period              1,173           177           124
                                     ---------     ---------     ---------
Cash at end of period                $   3,798     $   1,173     $     177
                                     =========     =========     =========


Supplemental disclosure of
 cash flow information:
Cash paid for interest               $     319      $    215     $     194
Cash paid for income taxes                  21             -             -

Supplemental schedule
 of non-cash investing and
 financing activities:
Capital expenditures funded
 by capital lease borrowings         $      91     $      79     $      25
Common stock issued for
 interest expense                          105             -             -
Common stock issued for
 conversion of debt                         85             -         1,930

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