SOURCE: Liberator Medical Holdings, Inc.

Liberator Medical Holdings, Inc. Logo

August 14, 2014 16:30 ET

Liberator Medical Reports Revenue of $18.6 Million for Its Fiscal Third Quarter Ended June 30, 2014

The Company Reports Net Income of $5.7 Million, or $0.11 per share, for the 9 Months Ended June 30, 2014 up 19.4% Over the Same Period Last Year

STUART, FL--(Marketwired - August 14, 2014) - Liberator Medical Holdings, Inc. (NYSE MKT: LBMH) today announced the financial results for its fiscal third quarter ended June 30, 2014.

Net sales for the three months ended June 30, 2014, increased by $1,087,000, or 6.2%, to $18,578,000, compared with net sales of $17,491,000 for the three months ended June 30, 2013. Net sales for the nine months ended June 30, 2014, increased by $3,058,000, or 5.9%, to $54,834,000, compared with net sales of $51,776,000 for the nine months ended June 30, 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.

       
   Three Months Ended June 30  Nine Months Ended June 30
Dollars in Thousands  Q3 FY2014  Q3 FY2013  %  Q3 FY2014  Q3 FY2013  %
Net Sales  $18,578  $17,491  6.2  $54,834  $51,776  5.9
Gross Profit  $11,751  $10,893  7.6  $34,514  $32,604  5.9
Net Income  $1,983  $2,014  (1.5)  $5,716  $4,786  19.4
                 
                 

Income from operations for the three months ended June 30, 2014, decreased by $240,000, or 7.2%, to $3,116,000, compared with the three months ended June 30, 2013. The decrease in operating income is primarily attributed to an increase in advertising expense, general and administrative expenses, and bad debt expense. 

For the nine months ended June 30, 2014, income from operations increased by $1,241,000, or 15.6%, to $9,213,000, compared with the nine months ended June 30, 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.

Net income for the third quarter of fiscal year 2014 was $1,983,000 or $0.04 per diluted share, compared with net income of $2,014,000 or $0.04 per diluted share, for the third quarter of fiscal year 2013. Net income for the nine months ended June 30, 2014 was $5,716,000 or $0.11 per diluted share, compared with net income of $4,786,000 or $0.09 per diluted share, for the nine months ended June 30, 2013 an increase of 19.4%.

The Company had cash of $10,264,000 at June 30, 2014, compared with cash of $12,453,000 at September 30, 2013, a decrease of $2,189,000. The decrease in cash for the nine months ended June 30, 2014, was primarily due to $3,945,000 of cash used in financing activities and, $310,000 of cash used in investing activities, partially offset by $2,066,000 of cash provided by operating activities.

"During our fiscal third quarter we made key investments in our organizational infrastructure to improve the efficiency and performance of our customer-facing staff. These expenditures resulted in higher general and administrative expenses in the quarter. We are investing in acquiring and serving our customers, which is central to our mission as a healthcare products provider and to achieving the maximum return on our advertising expenditures. We are pleased that we have grown sales and income over the last nine months and we will continue to make investments that support our growth and create efficiencies that improve our operating margins," commented Mark Libratore, President and CEO. 

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 June 30, 2014 (unaudited) and September 30, 2013 
(In thousands, except dollar per share amounts) 
  
   June 30,   September 30,  
   2014   2013  
Assets           
Current Assets:           
 Cash  $10,264   $12,453  
 Accounts receivable, net of allowances of $4,552 and $4,502, respectively   8,998    7,836  
 Inventory, net of allowance for obsolete inventory of $339 and $308, respectively   2,085    2,187  
 Deferred tax assets   2,110    2,067  
 Prepaid and other current assets   931    219  
  Total Current Assets   24,388    24,762  
Property and equipment, net of accumulated depreciation of $3,913 and $3,492, respectively   908    1,044  
Deferred advertising, net   25,721    22,705  
Intangible assets, net of accumulated amortization of $252 and $169, respectively   449    414  
Other assets   175    174  
Total Assets  $51,641   $49,099  
            
Liabilities and Stockholders' Equity           
Current Liabilities:           
 Accounts payable  $5,080   $4,915  
 Accrued liabilities   1,738    1,354  
 Dividends payable   1,589    1,569  
 Income tax payable   227    1,195  
 Other current liabilities   83    111  
  Total Current Liabilities   8,668    9,144  
Deferred tax liabilities   9,447    8,561  
Credit line facility   1,500    1,500  
Other long-term liabilities   126    63  
Total Liabilities   19,790    19,268  
            
Stockholders' Equity:           
Common stock, $0.001 par value, 200,000 shares authorized, 53,318 and 52,637 shares issued, respectively; 52,964 and 52,283 shares outstanding at June 30, 2014, and September 30, 2013, respectively   53    53  
Additional paid-in capital   36,160    35,111  
Accumulated deficit   (3,882 )  (4,853 )
Treasury stock, at cost; 354 shares at June 30, 2014, and September 30, 2013   (480 )  (480 )
Total Stockholders' Equity   31,851    29,831  
Total Liabilities and Stockholders' Equity  $51,641   $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 nine months ended June 30, 2014 and 2013 
(Unaudited) 
(in thousands, except per share amounts) 
  
   Three Months Ended June 30,   Nine Months Ended June 30,  
   2014   2013   2014   2013  
                      
Net Sales  $18,578   $17,491   $54,834   $51,776  
                      
Cost of Sales   6,827    6,598    20,320    19,172  
                      
Gross Profit   11,751    10,893    34,514    32,604  
                      
Operating Expenses                     
 Payroll, taxes and benefits   3,650    3,570    10,988    11,079  
 Advertising   2,553    2,146    7,250    6,617  
 Bad debts   845    541    2,487    2,986  
 Depreciation and amortization   166    171    505    509  
 General and administrative   1,421    1,109    4,071    3,441  
Total Operating Expenses   8,635    7,537    25,301    24,632  
                      
Income from Operations   3,116    3,356    9,213    7,972  
                      
Other Expenses   (12 )  (20 )  (38 )  (62 )
                      
Income before Income Taxes   3,104    3,336    9,175    7,910  
                      
Provision for Income Taxes   1,121    1,322    3,459    3,124  
                      
Net Income  $1,983   $2,014   $5,716   $4,786  
                      
Basic earnings per share:                     
Weighted average shares outstanding   52,823    51,837    52,585    49,387  
Earnings per share  $0.04   $0.04   $0.11   $0.10  
                      
Diluted earnings per share:                     
Weighted average shares outstanding   53,619    52,393    53,513    52,386  
Earnings per share  $0.04   $0.04   $0.11   $0.09  
                      
Dividends declared per common share*  $0.03   $0.05   $0.09   $0.05  
                 
                 

 * Two quarterly dividends were declared during the three months ended June 30, 2013

See accompanying notes to unaudited condensed consolidated financial statements.

  
Liberator Medical Holdings, Inc. and Subsidiaries 
Condensed Consolidated Statements of Cash Flows 
For the nine months ended June 30, 2014 and 2013 
(Unaudited) 
(in thousands) 
  
   Nine Months Ended  
   June 30,  
   2014   2013  
Cash flow from operating activities:           
 Net Income  $5,716   $4,786  
 Adjustments to reconcile net income to net cash provided by operating activities:           
  Depreciation and amortization   7,702    6,996  
  Equity based compensation   184    63  
  Provision for doubtful accounts and contractual adjustments   2,685    3,214  
  Deferred income taxes   843    2,153  
  Reserve for inventory obsolescence   31    157  
 Changes in operating assets and liabilities:           
  Accounts receivable   (3,848 )  (1,230 )
  Deferred advertising   (10,213 )  (6,975 )
  Inventory   107    547  
  Other assets   (692 )  (95 )
  Income taxes prepaid and payable   (968 )  860  
  Accounts payable   165    (2,282 )
  Accrued liabilities   376    374  
  Other liabilities   (22 )  (7 )
Net Cash Flow Provided by Operating Activities   2,066    8,561  
            
Cash flow from investing activities:           
 Purchase of property and equipment   (153 )  (361 )
 Proceeds from sale of property and equipment   4    -  
 Acquisition of business   (161 )  -  
Net Cash Flow Used in Investing Activities   (310 )  (361 )
            
Cash flow from financing activities:           
 Proceeds from employee stock purchase plan   -    48  
 Proceeds from exercise of stock options and warrants   694    153  
 Cash dividends paid   (4,725 )  (1,044 )
 Costs associated with credit line facility   (21 )  (21 )
 Income tax benefit related to exercise of stock options   171    -  
 Payments of capital lease obligations   (64 )  (52 )
Net Cash Flow Used in Financing Activities   (3,945 )  (916 )
            
Net increase (decrease) in cash   (2,189 )  7,284  
            
Cash at beginning of period   12,453    3,326  
Cash at end of period  $10,264   $10,610  
            
            

See accompanying notes to unaudited condensed consolidated financial statements.

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