SOURCE: Liberator Medical Holdings, Inc.

Liberator Medical Holdings, Inc. Logo

May 15, 2014 17:00 ET

Liberator Medical Reports Revenue of $17.6 Million for Its Fiscal Second Quarter Ended March 31, 2014

The Company Reports Net Income of $1.6 Million, or $0.03 per share, for the Quarter

STUART, FL--(Marketwired - May 15, 2014) - Liberator Medical Holdings, Inc. (NYSE MKT: LBMH) today announced the financial results for its fiscal second quarter ended March 31, 2014. Financial highlights are summarized below:

Dollars in thousands Q2 FY2014  Q2 FY2013  Change  
           
Net sales $17,619  $16,734  5.3 %
             
Operating income  2,597   2,358  10.1 %
             
Net income $1,613  $1,420  13.6 %

Net sales for the three months ended March 31, 2014, increased by $885,000, or 5.3%, to $17,619,000, compared with net sales of $16,734,000 for the three months ended March 31, 2013. Net sales for the six months ended March 31, 2014, increased by $1,971,000, or 5.7%, to $36,256,000, compared with net sales of $34,285,000 for the six months ended March 31, 2013. The increase in net sales was primarily due to our continued emphasis on our direct response advertising campaign to acquire new customers and our emphasis on customer service to maximize the reorder rates for our recurring customer base.

Income from operations for the three months ended March 31, 2014, increased by $239,000, or 10.1%, to $2,597,000, compared with the three months ended March 31, 2013. For the six months ended March 31, 2014, income from operations increased by $1,481,000, or 32.1%, to $6,097,000, compared with the six months ended March 31, 2013. The increase in operating income is primarily attributed to increased gross profits driven by our increased sales volumes as well as a reduction as a percentage of sales in payroll and bad debts expense, partially offset by an increase in general and administrative expenses.

Net income for the second quarter of fiscal year 2014 was $1,613,000 or $0.03 per diluted share, compared with net income of $1,420,000, or $0.03 per diluted share, for the second quarter of fiscal year 2013. Net income for the six months ended March 31, 2014 was $3,733,000 or $0.07 per diluted share, compared with net income of $2,772,000, or $0.05 per diluted share, for the six months ended March 31, 2013.

The Company had cash of $9,573,000 at March 31, 2014, compared with cash of $12,453,000 at September 30, 2013, a decrease of $2,880,000. The decrease in cash for the six months ended March 31, 2014, is primarily attributable to $3,411,000 used for taxes, $944,000 of which will be applied to future periods, dividend payments of $3,141,000 and $2,090,000 in increased advertising expenditures.

Mark Libratore, the Company's President and CEO, commented, "In the second quarter we encountered our normal seasonal sales weakness associated with the renewal of calendar year deductibles, continued delayed payments due to Medicare's industry wide auditing of medical supply claims and a significant increase in income tax payments. I am pleased to report that Liberator achieved positive revenue and operating margin growth in our fiscal second quarter.

"As we have done from time-to-time we have taken the opportunity to pulse our advertising expenditures. It is our intent to utilize excess cash to grow our customer base. Our experience has demonstrated the benefit over time of our advertising expenditures including, but not limited to the invaluable insights we gain. We will continue to manage our advertising expenditures to balance growth and cash flow to maximize the return realized by our shareholders."

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, our Company's 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, 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

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.

 
 
Liberator Medical Holdings, Inc. and Subsidiaries
 Condensed Consolidated Balance Sheets
 As of March 31, 2014 (unaudited) and September 30, 2013
 (In thousands, except dollar per share amounts)
 
  March 31,   September 30,  
  2014   2013  
Assets        
Current Assets:        
  Cash $9,573   $12,453  
  Accounts receivable, net of allowances of $4,659 and $4,502, respectively  9,147    7,836  
  Inventory, net of allowance for obsolete inventory of $327 and $308, respectively  2,346    2,187  
  Prepaid income taxes  944    -  
  Deferred tax assets  2,131    2,067  
  Prepaid and other current assets  521    219  
   Total Current Assets  24,662    24,762  
Property and equipment, net of accumulated depreciation of $3,776 and $3,492, respectively  845    1,044  
Deferred advertising, net  25,070    22,705  
Intangible assets, net of accumulated amortization of $223 and $169, respectively  478    414  
Other assets  178    174  
Total Assets $51,233   $49,099  
           
Liabilities and Stockholders' Equity          
Current Liabilities:          
  Accounts payable $5,740   $4,915  
  Accrued liabilities  1,499    1,354  
  Dividends payable  1,584    1,569  
  Income tax payable  181    1,195  
  Other current liabilities  85    111  
   Total Current Liabilities  9,089    9,144  
   Deferred tax liabilities  9,338    8,561  
Credit line facility  1,500    1,500  
Other long-term liabilities  32    63  
Total Liabilities  19,959    19,268  
           
Stockholders' Equity:          
Common stock, $0.001 par value, 200,000 shares authorized, 53,168 and 52,637 shares issued, respectively; 52,814 and 52,283 shares outstanding at March 31, 2014, and September 30, 2013, respectively  53    53  
Additional paid-in capital  35,977    35,111  
Accumulated deficit  (4,276 )  (4,853 )
Treasury stock, at cost; 354 shares at March 31, 2014, and September 30, 2013  (480 )  (480 )
Total Stockholders' Equity  31,274    29,831  
Total Liabilities and Stockholders' Equity $51,233   $49,099  
 
 
See accompanying notes to unaudited condensed consolidated financial statements. 
 
 
Liberator Medical Holdings, Inc. and Subsidiaries
 Condensed Consolidated Statements of Operations
 For the three and six months ended March 31, 2014 and 2013
 (Unaudited)
 (in thousands, except per share amounts)
 
  Three Months Ended March 31,   Six Months Ended March 31,  
                 
  2014   2013   2014   2013  
                 
Net Sales $17,619   $16,734   $36,256   $34,285  
                     
Cost of Sales  6,611    6,000    13,493    12,574  
                     
Gross Profit  11,008    10,734    22,763    21,711  
                     
Operating Expenses                    
  Payroll, taxes and benefits  3,681    3,666    7,338    7,509  
  Advertising  2,371    2,269    4,697    4,471  
  Bad debts  818    1,167    1,642    2,445  
  Depreciation and amortization  168    174    339    338  
  General and administrative  1,373    1,100    2,650    2,332  
Total Operating Expenses  8,411    8,376    16,666    17,095  
                     
Income from Operations  2,597    2,358    6,097    4,616  
                     
Other Expenses  (13 )  (21 )  (26 )  (42 )
                     
Income before Income Taxes  2,584    2,337    6,071    4,574  
                     
Provision for Income Taxes  971    917    2,338    1,802  
                     
Net Income $1,613   $1,420   $3,733   $2,772  
                     
Basic earnings per share:                    
Weighted average shares outstanding  52,578    48,177    52,467    48,162  
Earnings per share $0.03   $0.03   $0.07   $0.06  
                     
Diluted earnings per share:                    
Weighted average shares outstanding  53,602    52,277    53,450    52,214  
Earnings per share $0.03   $0.03   $0.07   $0.05  
                     
Dividends declared per common share $0.03    -   $0.06    -  
 
 
See accompanying notes to unaudited condensed consolidated financial statements.
 
 
Liberator Medical Holdings, Inc. and Subsidiaries
 Condensed Consolidated Statements of Cash Flows
 For the six months ended March 31, 2014 and 2013
 (Unaudited)
 (in thousands)
 
  Six Months Ended  
  March 31,  
  2014   2013  
Cash flow from operating activities:        
  Net Income $3,733   $2,772  
  Adjustments to reconcile net income to net cash provided by operating activities:          
   Depreciation and amortization  5,003    4,708  
   Equity based compensation  164    47  
   Provision for doubtful accounts and contractual adjustments  1,804    2,479  
   Deferred income taxes  713    1,476  
   Reserve for inventory obsolescence  19    103  
  Changes in operating assets and liabilities:          
   Accounts receivable  (3,114 )  (948 )
   Deferred advertising  (7,030 )  (4,940 )
   Inventory  (142 )  227  
   Other assets  (284 )  (164 )
   Income taxes prepaid and payable  (1,958 )  260  
   Accounts payable  824    (2,084 )
   Accrued liabilities  109    135  
   Other liabilities  (15 )  (1 )
Net Cash Flow Provided by (Used in) Operating Activities  (174 )  4,070  
           
Cash flow from investing activities:          
  Purchase of property and equipment  (75 )  (347 )
  Proceeds from sale of property and equipment  4    -  
  Acquisition of business  (134 )  -  
Net Cash Flow Used in Investing Activities  (205 )  (347 )
           
Cash flow from financing activities:          
  Proceeds from employee stock purchase plan  -    42  
  Proceeds from exercise of stock options and warrants  531    -  
  Cash dividends paid  (3,141 )  -  
  Costs associated with credit line facility  (21 )  (21 )
  Income tax benefit related to exercise of stock options  171    -  
  Payments of capital lease obligations  (41 )  (35 )
Net Cash Flow Used in Financing Activities  (2,501 )  (14 )
           
Net increase (decrease) in cash  (2,880 )  3,709  
           
Cash at beginning of period  12,453    3,326  
Cash at end of period $9,573   $7,035  
           
Supplemental disclosure of cash flow information:          
Cash paid for interest $27   $42  
Cash paid for income taxes $3,411   $47  
           
Supplemental schedule of non-cash financing activities:          
Cash dividends declared, but not yet paid $1,584   $-  
 
 
See accompanying notes to unaudited condensed consolidated financial statements.

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