SOURCE: Liberator Medical Holdings, Inc.

August 18, 2009 08:00 ET

Liberator Medical Recaps Record Third Quarter Results

Third Quarter Net Revenue Totals $6.9 Million With $794 Thousand in Net Income

STUART, FL--(Marketwire - August 18, 2009) - Liberator Medical Holdings, Inc. (OTCBB: LBMH), announces final results for the third fiscal quarter ended June 30, 2009, including record net revenue of $6.9 million and net income of $794 thousand.

Third Quarter 2009 Highlights

--  Net revenue for the third quarter ended June 30, 2009, was $6.95
    million, an increase of 184% from $2.44 million for the quarter ended June
    30, 2008.
--  Gross profit for the third quarter ended June 30, 2009, was $4.44
    million, an increase of 186% from $1.55 million for the quarter ended June
    30, 2008.
--  The Company's operating expenses for the three months ended June 30,
    2009, were $3.37 million, or 49% of revenue, compared to $1.60 million, or
    66% of revenue, for the three months ended June 30, 2008.
--  Net income increased to $794 thousand, or $0.02 per share, from a net
    loss of ($218) thousand for the quarter ended June 30, 2008.
--  The Company had $3.49 million in cash as of June 30, 2009, an increase
    of $2.32 million from September 30, 2008.
    

Liquidity and Capital Resources

Historically, the Company's principal use of cash has been to fund ongoing operations, which was financed primarily through the proceeds of sale of equity and debt securities. However, during the nine months ended June 30, 2009, the Company generated $698,742 of positive cash flow as a result of operating activities compared to a use of $1,506,116 of cash during the nine months ended June 30, 2008.

The Company had $3,488,557 in cash as of June 30, 2009, an increase of $2,315,539 from September 30, 2008. This increase in cash at June 30, 2009, was due to the Company's closing on a $2,500,000 convertible debt obligation in October 2008 plus cash generated in operating activities, partially offset by the purchase of property and equipment of $369,390 during the nine months ended June 30, 2009.

Results of Operations

The Company's revenue was $6,950,415, up $4,506,015 or 184%, for the three months ended June 30, 2009, compared to $2,444,400 for the three months ended June 30, 2008, due to a substantial advertising campaign to obtain new mail-order customers. For the nine months ended June 30, 2009, revenue was $18,119,489, up $12,820,330 or 242%, compared to $5,299,159 for the nine months ended June 30, 2008, as a result of the advertising campaign.

The Company's gross profit was $4,444,546, up $2,889,829 or 186%, for the three months ended June 30, 2009, compared to $1,554,717 for the three months ended June 30, 2008, and $11,694,209, up $8,319,935 or 247%, for the nine months ended June 30, 2009, compared to $3,374,274 for the nine months ended June 30, 2008, as a result of the Company's increased revenues.

The Company's operating expenses for the three months ended June 30, 2009 were $3,372,069, or 49% of revenue, compared to $1,606,869, or 66% of revenue, for the three months ended June 30, 2008. The Company's operating expenses for the nine months ended June 30, 2009, were $9,749,571, or 54% of revenue, compared to $4,537,208, or 86% of revenue, for the nine months ended June 30, 2008. Incremental expenses were less as compared to incremental revenues. The increases in operating expenses are primarily attributed to increased spending levels for employees, advertising, professional fees, rent, and allowance for bad debts to support the increase in revenues.

The Company's interest expense for the three months ended June 30, 2009, was $267,232 compared to $167,049 for the three months ended June 30, 2008. The Company's interest expense for the nine months ended June 30, 2009, was $812,407 compared to $280,438 for the nine months ended June 30, 2008. The increase in interest expense is primarily a result of two convertible debt offerings during the second and third quarters of fiscal year 2008 and a third convertible debt offering in October 2008.

The Company's net income was $793,889 for the three months ended June 30, 2009, an increase of $1,011,724 compared to a net loss of ($217,835) for the three months ended June 30, 2008. The Company's net income was $1,134,558 for the nine months ended June 30, 2009, an increase of $2,576,564 compared to a net loss of ($1,442,006) for the nine months ended June 30, 2008. The increases in net income are due to substantially higher sales volumes at substantially lower incremental operating expenses.

Stay up-to-date with current events by visiting our website www.liberatormedical.com or by joining Liberator Medical's E-Mail Alert List. Join by clicking: 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. Approximately 85% of its revenue 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, and 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 "Risk and Uncertainties" in our annual report on Form 10-KSB 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
                   Condensed Consolidated Balance Sheets

                                                June 30,     September 30,
                                                  2009           2008
                                              -------------  -------------
                                               (Unaudited)
                     Assets
Current Assets
Cash                                          $   3,488,557  $   1,173,018
Accounts receivable, net of allowance for
 doubtful accounts of $2,097,825 and
 $1,055,606, respectively                         3,493,813      2,405,102
Prepaid expenses                                     46,590        321,182
Inventory, net of allowance for obsolete
 inventory of $50,000 and $50,000,
 respectively                                     1,235,058        785,884
Deferred advertising, current portion             1,658,265        769,851
Other                                                 2,953          1,848
                                              -------------  -------------
Total Current Assets                              9,925,236      5,456,885
                                              -------------  -------------

Property and Equipment
Property and Equipment, net of accumulated
 depreciation of $928,717 and $714,641,
 respectively                                     1,062,112        815,833

Other Assets
Deferred advertising, net of current portion      1,435,418        660,524
Deferred loan costs                                 466,337        492,821
Deposits                                            114,690        100,089
                                              -------------  -------------
Total Other Assets                                2,016,445      1,253,434
                                              -------------  -------------
Total Assets                                  $  13,003,793  $   7,526,152
                                              =============  =============


      Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable                              $   2,120,278  $     900,448
Accrued liabilities                                 431,377        289,848
Stockholder loan                                  1,664,649      1,664,649
Convertible notes payable, net of unamortized
 discount of $406,570 and $56,833,
 respectively                                     3,734,356        772,163
Capital lease obligations, current portion           78,093         50,816
Deferred rent liability, current portion             56,244         48,261
                                              -------------  -------------
Total Current Liabilities                         8,084,997      3,726,185
                                              -------------  -------------

Long-Term Liabilities
Convertible notes payable, net of unamortized
 discount of $111,773 and $748,921,
 respectively                                     2,406,926      2,788,704
Capital lease obligations, net of current
 portion                                             90,772         82,155
Deferred rent liability, net of current
 portion                                            172,045        214,215
                                              -------------  -------------
Total Long-Term Liabilities                       2,669,743      3,085,074
                                              -------------  -------------
Total Liabilities                                10,754,740      6,811,259
                                              -------------  -------------

Stockholders’ Equity
Common stock, $.001 par value, 200,000,000
 shares authorized, 32,392,311 and 32,050,366
 shares issued at June 30, 2009 and September
 30, 2008, respectively                              32,392         32,050
Additional paid-in capital                       11,617,104     11,177,266
Accumulated deficit                              (9,359,865)   (10,494,423)
                                              -------------  -------------
                                                  2,289,631        714,893
Less: Treasury stock, at cost (85,600 shares)       (40,578)            --
                                              -------------  -------------
Total Stockholders’ Equity                        2,249,053        714,893
                                              -------------  -------------
Total Liabilities and Stockholders’ Equity    $  13,003,793  $   7,526,152
                                              =============  =============

  See accompanying notes to unaudited condensed consolidated financial
      statements included in 10Q filed with the SEC on 8/12/09





               Liberator Medical Holdings, Inc. and Subsidiaries
                Condensed Consolidated Statements of Operations
          For the three and nine months ended June 30, 2009 and 2008
                                    (Unaudited)

                       Three Months Ended            Nine Months Ended
                            June 30,                     June 30,
                    --------------------------  --------------------------
                        2009          2008          2009          2008
                    ------------  ------------  ------------  ------------
Sales               $  6,950,415  $  2,444,400  $ 18,119,489  $  5,299,159

Cost of Sales          2,505,869       889,683     6,425,280     1,924,885

                    ------------  ------------  ------------  ------------
Gross Profit           4,444,546     1,554,717    11,694,209     3,374,274
                    ------------  ------------  ------------  ------------

Operating Expenses
Payroll, taxes and
 benefits              1,517,704       650,715     3,857,069     1,808,261
Advertising              615,512       107,674     1,371,890       256,521
Bad debts                373,182       271,751     1,861,162       577,686
Depreciation              80,346        45,900       214,075       137,700
General and
 administrative          785,325       530,829     2,445,375     1,757,040
                    ------------  ------------  ------------  ------------
Total Operating
 Expenses              3,372,069     1,606,869     9,749,571     4,537,208
                    ------------  ------------  ------------  ------------


Income (Loss) from
 Operations            1,072,477       (52,152)    1,944,638    (1,162,934)
                    ------------  ------------  ------------  ------------


Other Income
 (Expense)
Interest Expense        (267,232)     (167,049)     (812,407)     (280,438)
Interest Income            3,084         1,366        16,767         1,366
                    ------------  ------------  ------------  ------------
Total Other Income
 (Expense)              (264,148)     (165,683)     (795,640)     (279,072)
                    ------------  ------------  ------------  ------------

Income (Loss) before
 Income Taxes            808,329      (217,835)    1,148,998    (1,442,006)

Provision for Income
 Taxes                    14,440            --        14,440            --
                    ------------  ------------  ------------  ------------

Net Income (Loss)   $    793,889  $   (217,835) $  1,134,558  $ (1,442,006)
                    ============  ============  ============  ============

Basic earnings
 (loss) per share:
Weighted average
 shares outstanding   32,132,943    32,050,366    32,067,847    31,683,081
Earnings (loss) per
 share              $       0.02  $      (0.01) $       0.04  $      (0.05)

Diluted earnings
 (loss) per share:
Weighted average
 shares outstanding   37,334,188    32,050,366    35,990,375    31,683,081
Earnings (loss) per
 share              $       0.02  $      (0.01) $       0.03  $      (0.05)

   See accompanying notes to unaudited condensed consolidated financial
       statements included in 10Q filed with the SEC on 8/12/09






               Liberator Medical Holdings, Inc. and Subsidiaries
                Condensed Consolidated Statements of Cash Flows
                For the nine months ended June 30, 2009 and 2008
                                  (Unaudited)


                                                  2009           2008
                                              -------------  -------------
Cash flow from operating activities:
Net Income (Loss)                             $   1,134,558   $ (1,442,006)

Adjustments to reconcile net income (loss) to
 net cash provided by (used in) operating
 activities:
Depreciation and amortization                     1,457,997        385,962
Equity based compensation                           365,333        601,991
Bad debt expense                                  1,861,162        577,686
Non-cash interest related to convertible notes
 payable                                            564,923         93,255
Amortization of non-cash loan issuance costs         28,931          4,491
Changes in operating assets and liabilities:
Accounts receivable                              (2,949,873)    (1,505,831)
Prepaid expenses and other current assets           (33,895)        (8,254)
Deposits                                            (14,601)        (2,498)
Inventory                                          (449,174)      (206,232)
Accounts payable                                  1,219,830        600,008
Accrued expenses                                    112,033         11,743
Deferred rent                                       (34,187)       (31,486)
Deferred loan costs                                 342,935         98,289
Deferred advertising                             (2,907,230)      (683,234)
                                              -------------  -------------
Net Cash Flow Provided by (Used in) Operating
 Activities                                         698,742     (1,506,116)
                                              -------------  -------------
Cash flow from investing activities:
Purchase of property and equipment                 (369,390)      (137,559)
                                              -------------  -------------
Net Cash Flow Used in Investing Activities         (369,390)      (137,559)
                                              -------------  -------------

Cash flow from financing activities:
Proceeds from sale of stock                              --        686,200
Proceeds from issuance of convertible notes       2,500,000      4,304,000
Proceeds from notes payable                              --         53,000
Broker commissions                                 (203,056)      (356,500)
Legal and other fees paid                          (122,609)      (199,370)
Purchase of treasury stock                          (40,578)            --
Payments of long-term debt and capital lease
 obligations                                       (147,570)      (328,840)
                                              -------------  -------------
Net Cash Flow Provided by Financing
 Activities                                       1,986,187      4,158,490
                                              -------------  -------------

Net increase in cash                              2,315,539      2,514,815

Cash at beginning of period                       1,173,018        176,820
                                              -------------  -------------
Cash at end of period                         $   3,488,557  $   2,691,635
                                              -------------  -------------

Supplemental disclosure of cash flow
 information:
Cash paid for interest                        $     289,739  $     154,799
Cash paid for income taxes                    $      21,260  $          --

Supplemental schedule of non-cash investing
 and financing activities:
Capital expenditures funded by capital lease
 borrowings                                   $      90,965  $      54,083
Common stock issued for interest expense      $     104,983  $          --
Common stock issued for conversion of debt    $      85,000  $      25,000

    See accompanying notes to unaudited condensed consolidated financial
          statements included in 10Q filed with the SEC on 8/12/09

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