Q4 2025 InfuSystem Holdings Inc Earnings Call

February 24, 2026

Speaker #3: Good day and welcome to InfusSystem Holdings Inc report, fourth quarter fiscal year 2025 financial results conference call. All participants will be in listen-only mode.

Speaker #3: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Speaker #3: To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded.

Speaker #3: I would now like to turn the conference over to Glenn Exelrod with Bristol IR, please go ahead.

Speaker #4: Good morning and thank you for joining us today to review InfusSystem fourth quarter 2025 financial results and the December 31st, 2025. With us today on the call are Carrie Lachance, Chief Executive Officer and Barry Steele, Chief Financial Officer.

Glenn Axelrod: Good morning, thank you for joining us today to review InfuSystem Q4 2025 financial results ended 31 December 2025. With us today on the call are Kerry Lachance, Chief Executive Officer, and Barry Steele, Chief Financial Officer. After the conclusion of today's prepared remarks, we will open the call for questions. Before we begin with prepared remarks, I would like to remind everyone, certain statements made by the management team of InfuSystem during this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #4: After the conclusion of today's prepared remarks, we will open the call for questions. Before we begin with prepared remarks, I would like to remind everyone that certain statements made by the management team of InfuSystem during this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Speaker #4: Except for the statements of historical fact, this conference call may contain forward-looking

Glenn Axelrod: Except for the statements of historical fact, this conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed under the risk factors in the documents filed by the company with the Securities and Exchange Commission, including the annual report and Form 10-K for the year ended 31 December 2024. Forward-looking statements speak only as of the date the statements were made. The company can give no assurance that such forward-looking statements will prove to be correct. InfuSystem does not undertake and specifically disclaims any obligation to update any forward-looking statements, except as required by law. Now, I'd like to turn the call over to Carrie Lachance, Chief Executive Officer of InfuSystem. Carrie?

Speaker #1: Statements that involve risks and uncertainties , some of which are detailed under the Risk Factors in the documents filed by the company . With the Securities and Exchange Commission , including the annual report and Form 10-K for the year ended December 31st , 2024 .

Speaker #1: Forward looking statements speak only as of the date the statements were made . The company can give no assurance that such forward looking statements will prove to be correct .

Speaker #1: And if you system does not undertake and specifically disclaims any obligation to update any forward looking statements except as required by law . Now I'd like to turn the call over to Carrie Lachance chief Executive Officer of Infuse System .

Speaker #1: Kerry

Speaker #2: Thank you . Glenn , and good morning , everyone . Welcome to fourth quarter Fiscal Year 2025 earnings Call . Thank you all for joining us today .

Carrie Lachance: Thank you, Glenn. Good morning, everyone. Welcome to InfuSystem's Q4 fiscal year 2025 Earnings Call. Thank you all for joining us today. I will provide a Q4 overview, highlighting key initiatives, outlining our strategic priorities, and providing our outlook for 2026. Barry will provide a detailed summary of our financial results. I will then come back for just some closing comments before opening the line to questions. During the Q4, we closed out the 2025 reporting period by delivering solid top-line growth of 7%, with full year Adjusted EBITDA expanding 24% to $31.5 million, and strong operating cash flow of $7.1 million.

Speaker #2: I will provide a fourth quarter overview highlighting key initiatives outlining our strategic priorities and providing our outlook for 2026 . Then Barry will provide a detailed summary of our financial results .

Speaker #2: I will then come back for some closing comments before opening the line to questions During the fourth quarter , we closed out the 2025 reporting period by delivering solid top line growth of 7% with full year adjusted EBITDA , expanding 24% to 31.5 million and strong operating cash flow of 7.1 million .

Speaker #2: We further strengthened our balance sheet with net debt declining 30% year over year , while returning capital to our shareholders through our share repurchase program .

Carrie Lachance: We further strengthened our balance sheet, with net debt declining 30% year-over-year, while returning capital to our shareholders through our share repurchase program, retiring 137,000 shares in Q4 and 1.3 million shares for the full year. We continue to make advances on key initiatives that are expected to help us accelerate our growth rate of net revenue, Adjusted EBITDA, and operating cash flows during 2026. We completed the migration of our wound care business to the new revenue cycle application that we obtained in conjunction with the acquisition of Apollo Medical during Q2 2025. This includes advanced wound care, negative pressure wound therapy devices, and our latest product category, pneumatic compression devices. This important initiative allows us to reduce processing costs and expand our volume capacity, thereby opening the door to increased revenue volume.

Speaker #2: Retiring 137,000 shares in the fourth quarter and 1.3 million shares for the full year . We continue to make advances on key initiatives that are expected to help us accelerate our growth rate of net revenue , adjusted EBITDA and operating cash flows during 2026 .

Speaker #2: We completed the migration of our wound care business to the new revenue cycle application that we obtained in conjunction with the acquisition of Apollo Medical.

Speaker #2: During the second quarter of 2025 . This includes advanced wound care , negative pressure , wound therapy devices , and our latest product category , pneumatic compression devices This important initiative allows us to reduce processing costs and expand our volume capacity , thereby opening the door to increased revenue volume This leaves our oncology business by far the largest in our patient services segment .

Carrie Lachance: This leaves our oncology business, by far the largest in our Patient Services segment, as the final therapy left to migrate. In addition, we obtained new accreditations for additional home healthcare DME products that we plan to add to our Patient Services product portfolio. We are currently working with the manufacturers of some of these products, with the goal of repeating the speed and success of our latest PCD product launch. We feel positive on the current progress and look forward to providing more details on these products in the near future. We also restructured our field-based biomedical services team of technicians to better align with our reduced volume expectations for 2026 and to better position our capabilities to bring on smaller, more profitable client engagements.

Speaker #2: As the final therapy left to migrate . In addition , we obtained new accreditations for additional home healthcare . DME products that we plan to add to our patient services product portfolio .

Speaker #2: We are currently working with the manufacturers of some of these products , with the goal of repeating the speed and success of our latest PCD product launch We feel positive on the current progress and look forward to providing more details on these products in the near future .

Speaker #2: We also restructured our field based biomedical services team of technicians to better align with our reduced volume expectations for 2026 , and to better position our capabilities to bring on smaller , more profitable client engagements Finally , we made significant progress on our project to replace and upgrade our main information technology business application , which we plan to complete during the first quarter of 2026 .

Carrie Lachance: Finally, we made significant progress on our project to replace and upgrade our main information technology business application, which we plan to complete during Q1 2026. At project completion, we will reduce the current spending rate for the project and begin focusing on capturing productivity improvements that the new application enables within several departments. As we announced during our review of the 2025 Q3, we are focused on driving value creation through profitable growth, which led us to restructure our largest biomedical services contract, consequently, we are starting 2026 at a reduced revenue volume by $7.1 million or 5.5% annually. This was a necessary change that will have an immediate favorable impact on our reporting earnings and cash flow, since we expect an even larger reduction in our expenses.

Speaker #2: At project completion, we will reduce the current spending rate for the project and begin focusing on capturing productivity improvements that the new application enables within several departments.

Speaker #2: As we announced during our review of the 2025 third quarter , we are focused on driving value creation through profitable growth , which led us to restructure our largest biomedical services contract and consequently , we are starting 2026 at a reduced revenue volume by 77.

Speaker #2: $1 million , or 5.5% annually . This was a necessary change that will have an immediate favorable impact on our reporting . Earnings and cash flow .

Speaker #2: Since we expect an even larger reduction in our expenses after adjusting for this decrease on a pro forma basis, we are expecting annual revenue growth in a range of 6 to 8%.

Carrie Lachance: After adjusting for this decrease on a pro forma basis, we are expecting annual revenue growth in a range of 6% to 8%. We anticipate that our adjusted EBITDA margin will continue in the mid to low 20% range. This is inclusive of the impact of costs related to our ongoing information technology system upgrade, which are expected to decrease after the Q1. We are excited about the opportunities ahead and look to update and refine our guidance as we move throughout the year. Now I'll turn it over to Barry for a detailed review of the Q4 financial results. Barry?

Speaker #2: Additionally , we anticipate that our adjusted EBITDA margin will continue in the mid to low 20% range . This is inclusive of the impact of costs related to our ongoing information technology system .

Speaker #2: Upgrade , which are expected to decrease after the first quarter . We are excited about the opportunities ahead and look to update and refine our we move throughout the year Now I'll turn it over to Barry for a detailed review of the fourth quarter financial results .

Speaker #2: Barry .

Speaker #3: Thank you Kerry , and thank you everyone on the call for joining us today . I'm going to give details for the current quarter's results , provide a few insights on the 2026 outlook , and I'll update you on our current financial position and how it changed during the quarter .

Barry Steele: Thank you, Carrie, thank you everyone on the call for joining us today. I'm going to give details for the current quarter's results, provide a few insights on the 2026 outlook, and I'll update you on our current financial position and how it changed during the quarter. Now, let me start with our financial results for the period. During Q4 2025, our net revenue totaled $36.2 million, representing a $2.4 million or 7% increase from the prior year Q4. Both the Patient Services and the Device Solutions segments contributed to the improvement. Patient Services net revenue increased by $1.1 million, or 5.4%, and included increased patient treatment volumes in oncology and wound care.

Speaker #3: Now , let me start with our financial results for the period During the fourth quarter of 2025 , our net revenue totaled 36.2 million , representing a 2.4 million , or 7% increase from the prior year .

Speaker #3: Fourth quarter . Both the patient services and the device Solutions segments contributed to the improvement Patient services net revenue increased by 1.1 million , or 5.4% , and included increased patient treatment volumes in oncology and wound care , oncology .

Barry Steele: oncology net revenue increased by approximately $500,000, or 2.8%, and wound care treatment volume revenue grew by nearly $900,000, which represented an increase of over 160%, driven largely by pneumatic compression devices, which launched in the previous quarter. Device Solutions net revenue increased by $1.3 million, or 9.7%. This increase was primarily attributable to $1 million in higher sales of medical equipment and just over $600,000 in higher revenue volume in biomedical services revenue. The equipment sales included some rental buyouts from a large customer, and the biomedical services increase came from a more diverse group of smaller customers. Partially offsetting these increases for Device Solutions was a $400,000 reduction in equipment rental revenue.

Speaker #3: Net revenue increased by approximately 500,000 , or 2.8% , and WellCare treatment volume revenue grew by nearly 900,000 , which represented an increase of over 160% , driven largely by pneumatic compression devices , which launched in the previous quarter Device solutions net revenue increased by 1.3 million , or 9.7% .

Speaker #3: This increase was primarily attributable to 1 million in higher sales of medical equipment , and just over 600,000 in higher revenue volume in biomedical services revenue .

Speaker #3: The equipment sales included some rental buyouts from a large customer, and the biomedical services increase came from a more diverse group of smaller customers. Partially offsetting these increases for Device Solutions was a $400,000 reduction in equipment rental revenue. Gross profit for the fourth quarter of 2025 was $20.4 million, which was a $2.2 million, or 12%, increase over the prior year.

Barry Steele: Gross profit for Q4 of 2025 was $20.4 million, which was a $2.2 million or 12% increase over the prior year Q4. Our gross margin percentage, at just over 56%, increased by 2.6% from the prior year amount, demonstrating our focus on profitable growth. This increase was mainly driven by improved labor efficiency and pricing in biomedical services, improved revenue mix favoring higher margin revenue such as oncology, lower procurement costs, and lower pump maintenance and disposable expenses. Selling, general, and administrative expenses for Q4 of 2025 totaled $14 million and was $865,000, or 6.5% higher than the prior year Q4 amount.

Speaker #3: Fourth quarter . Our gross margin percentage , at just over 56% , increased by 2.6% from the prior year amount , demonstrating our focus on profitable growth .

Speaker #3: This increase was mainly driven by improved labor efficiency and pricing in biomedical services , improved revenue mix favoring higher margin revenue such as oncology , lower procurement costs , and lower pump maintenance , and disposable expenses Selling , general and administrative expenses for the fourth quarter of 2025 totaled 14 million and was an 865,000 , or 6.5% higher than the prior year .

Speaker #3: Fourth quarter amount . Part of this increase was attributable to 689,000 and expenses associated with our project to upgrade our main enterprise resource planning software , which was 196,000 higher than the spend for the prior year .

Barry Steele: Part of this increase was attributable to $689,000 in expenses associated with our project to upgrade our main enterprise resource planning software, which was $196,000 higher than the spend for the prior year Q4. This project is now in the final phase, with a go-live launch expected during the current quarter, after which quarterly implementation costs are expected to decrease significantly. Other increases for the Q4 were related to additional headcount and revenue cycle and other personnel needed to support the higher revenue volume, offset partially by a lower accrual for short-term incentive compensation, portions of which were already capped and fully accrued due to performance metrics being already met at the end of the Q3.

Speaker #3: Fourth quarter . This project is now in the final phase , with a Go Live launch expected during the current quarter , after which quarterly implementation costs are expected to decrease to decrease significantly .

Speaker #3: Other increases for the fourth quarter were related to additional headcount and revenue cycle , and other personnel needed to support the higher revenue volume offset partially by a lower accrual for short term incentive compensation .

Speaker #3: Portions of which were already capped and fully accrued due to performance metrics being already met at the end of the third quarter Adjusted EBITDA during the 2020 fourth quarter was 8.8 million , which represented an increase of just over 1.3 million , or 17% , from the prior year Fourth quarter .

Barry Steele: Adjusted EBITDA during the 2025 Q4 was $8.8 million, which represented an increase of just over $1.3 million, or 17%, from the prior year Q4 Adjusted EBITDA. This represented a 34.3% of net revenue for 2025, which was above the prior year rate of 22.2%. It also was a all-time record, quarterly record. These amounts included the spending on the ERP project, which again, is expected to start to decrease by the Q2 here in 2026. For the full year of 2025, Adjusted EBITDA totaled $31.5 million, representing a margin of 21.9%, an increase of 3.1% from 18.8% in 2024.

Speaker #3: Adjusted EBITDA . This represented a 24.3 24.3% of net revenue for 2025 , which was above the prior year rate of 22.2% . It also was a all time record , quarterly record These amounts included the spending on the ERP project , which again is expected to start to decrease by the second quarter here in 2026 .

Speaker #3: For the full year of 2025 , adjusted EBITDA totaled 31.5 million , representing a margin of 21.9 , an increase of 3.1% from 18.8% in 2020 .

Speaker #3: For this reflects a significant year over year improvement of 6.2 million , or 24.3% , despite a 1.8 million increase in ERP project expenses .

Barry Steele: This reflects a significant year-over-year improvement of $6.2 million, or 24.3%, despite a $1.8 million increase in ERP project expenses. The improvements are another example showing that our focus on profitable revenue growth and operational efficiency is yielding meaningful results. Turning now to our outlook for 2026. As Carrie mentioned, we are forecasting an increase in our net revenues of 6.8% for 2026 on a pro forma basis after adjusting for the GE HealthCare contract restructuring. The low end of this range is achievable through initiatives we have put in place or have high visibility to, such as new customers that have already started in our oncology business, and new products, such as tDCS, that have already been launched.

Speaker #3: The improvements are another example , showing that our focus on profitable revenue growth and operational efficiency is yielding meaningful results Turning our to our outlook for 2026 .

Speaker #3: As Carrie mentioned , we are forecasting increase in our net revenues of 6.8% for 2026 on a pro forma basis . After adjusting for the GE healthcare contract restructuring , the low end of this range is achievable through initiatives we have put in place or have high visibility to , such as new customers that have already started in our oncology business and new products such as Pcds that have already been launched .

Speaker #3: The high end of the range will be possible when we are successful . Launching just a few of the new opportunities we are currently focusing on , but have not yet started .

Barry Steele: The high end of the range will be possible when we are successful launching just a few of the new opportunities we are currently focusing on, but have not yet started. These include new customers and products whose impact for 2026 will depend on our success rate and launch timing. Now, a few points on our financial position and capital reserves. For 2025, we generated operating cash flow totaling over $24.4 million. This amount was nearly $4 million, or 19%, higher than the amount realized during 2024. This increase was due to the higher Adjusted EBITDA, offset partially by a use of cash for working capital. Our net capital expenditures were $6.8 million in 2025, which represented a significant decrease from $13.2 million spent during 2024.

Speaker #3: These include a new customers and products whose impact for 2026 will depend on our success rate and launch timing . Now , a few points on our financial position and capital reserves for 2025 .

Speaker #3: We generated operating cash flow totaling over 24.4 million . This amount was nearly 4 million , or 19% higher than the amount realized during 2024 .

Speaker #3: This increase was due to the higher adjusted EBITDA offset partially by a use of cash for working capital Our net capital expenditures were 6.8 million in 2025 , which represented a significant decrease from 13.2 million spent during 2020 .

Speaker #3: For this trick, it was attributable to overall capital spending requirements being lower as compared to amounts in prior years. The sources of our revenue growth have been more weighted towards less capital-intensive revenue sources.

Barry Steele: This decrease was attributable to overall capital spending requirements being lower as compared to amounts in prior years, as the sources of our revenue growth have been more weighted towards less capital-intensive revenue sources. We expect these lower requirements to continue in 2026. We remain well positioned to fund continued net revenue growth with the growing cash flow from operations, backed by significant liquidity reserves available from our revolving line of credit and manageable leverage and debt service requirements. Our net debt decreased by $6.9 million during 2025. We were able to do this despite purchasing $9.9 million of our common stock during the year through our stock repurchase authorization. Our available liquidity continues to be strong and totaled nearly $58 million as of 31 December 2025.

Speaker #3: We expect these lower requirements to continue in 2026 . We remain well positioned to fund continued net revenue growth with the growing cash flow from operations backed by significant liquidity reserves available from our revolving line of credit and manageable leverage and debt service requirements .

Speaker #3: Our net debt decreased by $6.9 million during 2025. We were able to do this despite purchasing $9.9 million of our common stock during the year.

Speaker #3: Through our stock repurchase authorization , our available liquidity continues to be strong and totaled nearly 58 million as of December 31st , 2025 .

Speaker #3: At that time, our ratio of net debt to adjusted EBITDA was a modest 0.52 times. Our debt consists of $20 million in borrowings on our revolving line of credit, with no term payment requirements.

Barry Steele: At that time, our ratio of net debt to Adjusted EBITDA was a modest 0.52x. Our debt consists of $20 million in borrowings on our revolving line of credit with no term payment requirements. During Q3 2025, we amended our credit agreement, extending the facility for 2 additional years. The facility now expires in July 2030. We continue to benefit from an outstanding interest rate swap, which fixes our interest rate on the $20 million of our outstanding borrowings at a below-market rate of 3.8% until April 2028. I will now turn the call back over to Carrie.

Speaker #3: During the third quarter of 2025, we amended our credit agreement, extending the facility for two additional years. The facility now expires in July 2030.

Speaker #3: We continue to benefit from an outstanding interest rate swap , which fixes our interest rate on the 20 million of our outstanding borrowings at a below market rate of 3.8% until April of 2028 .

Speaker #3: I will now turn the call back over to Carrie

Speaker #2: Thanks , Barry As I reflect back on efforts made during fiscal year 2025 , the updates that we've shared with you today and what are currently focused on as we head into 2026 .

Carrie Lachance: Thanks, Barry. As I reflect back on efforts made during fiscal year 2025, the updates that we've shared with you today, and what we are currently focused on as we head into 2026, I hope that you will agree that we have been diligent in pursuing the strategic priorities we laid out for you during 2025. Those priorities are to execute with discipline, deliver profitable growth, and drive long-term value creation for our shareholders. Operator, we are ready for the Q&A portion of the call.

Speaker #2: I hope that you will agree that we have been diligent in pursuing the strategic priorities we laid out for 2025. Those priorities are to execute with discipline, deliver profitable growth, and drive long-term value creation for our shareholders. Operator, we are ready for the Q&A portion of the call.

Speaker #4: Thank you very much . We will now begin with the question and answer session To ask a question , you may press star then one on your telephone keypad If you are using a speakerphone , please pick up your handset before pressing the keys .

Glenn Axelrod: Thank you very much. We will now begin with the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Kyle Bowser with Roth Capital Partners. Please go ahead.

Operator: Thank you very much. We will now begin with the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Kyle Bowser with Roth Capital Partners. Please go ahead.

Speaker #4: If at any time your question has been addressed and you would like to withdraw your question , please press star then two . At this time we will pause momentarily to assemble our roster The first question comes from Kyle Boser with Roth Capital Partners .

Speaker #4: Please go ahead .

Speaker #5: Great . Good morning , Carrie . Thanks for all the updates and for taking my questions Maybe starting with the top line guidance .

Kyle Bowser: Great, good morning, Carrie and Barry. Thanks for all the updates and for taking my questions. Maybe starting with the top line guidance, 6% to 8% for the year, can you talk a little bit about, you know, how we should anticipate the growth rates within each segment, Patient Services and Device Solutions to trends? You know, would we anticipate a continuation of a higher percent growth in Device Solutions like we saw in Q4 versus Patient Services? Any color here would be appreciated.

Speaker #5: 6 to 8% for the year . Can you talk a little bit about , you know , how we should anticipate the growth rates within each segment ?

Speaker #5: Patient services and device solutions to trends . You know , would would we anticipate a continuation of of a higher percent growth in device solutions like we saw in Q4 versus patient services ?

Speaker #5: Any color here would be appreciated

Speaker #3: Yeah , I'll throw a couple of thoughts out there , Kyle . Definitely the patient services is where we see our growth mainly coming from .

Barry Steele: Yeah, I'll throw a couple of tough thoughts out there, Kyle. Definitely the Patient Services is where we see our growth mainly coming from. Even oncology, we see some success there, but wound care is our main focus right now for driving further volume through the PCDs that we launched last year and other products we might bring online. That's not to say that we don't see growth in Device Solutions. We definitely do. We're gonna give some revenue back because we restructured the GE contract, but we see lots of opportunities for us to take that team and grow the base at a much better returns for the company.

Speaker #3: Even oncology . We see some success there . But wound care is our main focus right now for for driving further volume through the pcds that we launched last year and other products we might bring online .

Speaker #3: That's not to say that we don't see growth in device solutions . We definitely do We're going to we're going to give some revenue back because we restructured the GE contract , but we see lots of opportunities for us to take that team and grow that base at a much better returns for the company

Speaker #5: Got it . Appreciate that . And on the adjusted EBITDA margin guidance , mid to low 20s , of course , it includes the planned reduction of the expenses from the ERP program .

Kyle Bowser: Got it. Appreciate that. And on the Adjusted EBITDA margin guidance, the mid to low twenties, of course, it includes the planned reduction of the, you know, expenses from the ERP program. Any senses to kind of the go forward, Adjusted EBITDA rate for, call it, like, Q2 through Q4, just since we'll be kind of working off of a new base, of expenses after Q1?

Speaker #5: Any sense as to kind of the go-forward adjusted EBITDA rate for, call it, Q2 through Q4, just since we'll be kind of working off of a new base of expenses after Q1?

Speaker #3: Yeah . Let me make a few high level comments about our margins . There's definitely , you know , we've worked hard in this past year to bring our margins up from from historical lower rates .

Barry Steele: Let me make a few high-level comments about our margins. There's definitely, you know, we've worked hard in this past year to bring our margins up from historical lower rates, we're gonna be able to carry that forward for sure. We're feeling very good about that. The restructuring in the biomed actually is helpful to our margins. There's a couple other things that to mention is that we do see headwinds in margins that we're gonna overcome, things like our increases in our healthcare costs, other sort of inflationary impacts. We think those will be headwinds that we'll overcome through the growth in new products.

Speaker #3: And so we're going to be able to carry that forward for sure . So we're feeling very good about that . The restructuring in the biomed actually is helpful to our margins .

Speaker #3: And there's a couple other things that dimension is that we do see headwinds in margins that we're going to overcome . Things like our increases in our health care costs .

Speaker #3: Other sort of inflationary impacts . We think those will , will , will , will , will , will be headwinds that we'll overcome through the growth in new products .

Speaker #3: So we're not seeing a lot of additional increase in margins generally as we go forward . But we feel like we're going to stay at this much higher level very , very strongly .

Barry Steele: we're not seeing a lot of additional increase in margins generally as we go forward, but we feel like we're gonna stay at this much higher level very strongly going forward. I don't know, Kyle, if that makes sense to you.

Speaker #3: Going forward . I don't care if that if that makes sense to you .

Speaker #5: Yeah . No Appreciate that . And then maybe just one more on the revenue cycle application that has been successfully integrated . It sounds like that's been very helpful .

Kyle Bowser: Yep. No, appreciate that. Then maybe just one more. On the revenue cycle application that has been successfully integrated, sounds like that's been very helpful in driving reduction in, you know, lead times, et cetera. Wound care delivered, you know, 160% revenue growth in the last quarter, albeit off of a lower base. Anything to call out here in wound care going forward and kind of how you anticipate the revenue cycle application to really help drive volume?

Speaker #5: And driving reduction in lead times etc. . Wound care delivered 160% revenue growth in the last quarter , albeit off of a lower base .

Speaker #5: Anything to call out here and wound care going forward and kind of how you anticipate the revenue cycle application to really help drive volume ?

Speaker #2: Yes , I'll take that . Barry . Good morning Kyle . You know , the revenue cycle system that we have implemented obviously took a little bit of time to get going .

Carrie Lachance: Yes, I'll take that, Barry. Good morning, Kyle. You know, the revenue cycle system that we have implemented obviously took a little bit of time to get going. We've, you know, we've entered most of our business, all of the wound care business, PCD into that. We are looking forward to, in probably the second half of the year, really starting our oncology business into that as well. It does allow us to, you know, take on some more volume and ramp in a more productive way and manner, both from a PCD and on any new product that will be going through that system. It's been helpful.

Speaker #2: We've we've , you know , we've entered most of our business , all of the wound care business , PKD into that . We are looking forward to in probably the second half of the year , really starting our oncology business into that as well .

Speaker #2: But it does allow us to , you know , take on some more volume and ramp in a more productive way and manner , both from a PKD and then any new product that will be going through that , through that system .

Speaker #2: So it's it's been helpful

Speaker #5: Sounds great . We'll congrats on all the updates and appreciate you taking my questions

Kyle Bowser: Sounds great. Well, congrats on all the updates, and appreciate you taking my question.

Speaker #2: Thanks , Bill

Carrie Lachance: Thanks, Kyle.

Speaker #4: Thank you. Your next question comes from Anderson Schock with B. Riley. Please go ahead.

Glenn Axelrod: Thank you. Your next question comes from Anderson Schock with B. Riley. Please go ahead.

Operator: Thank you. Your next question comes from Anderson Schock with B. Riley. Please go ahead.

Speaker #6: Hi. Good morning. Thank you for taking the questions. So, the ERP is expected to go live this quarter. I guess, what's the remaining spend to completion, and when should we expect to see the net maintenance cost savings fully materialize?

Operator: Hi, good morning. Thank you for taking the questions. The ERP is expected to go live this quarter. I guess, what's the remaining spend to completion, and when should we expect to see the net maintenance cost savings to fully materialize?

Anderson Schock: Hi, good morning. Thank you for taking the questions. The ERP is expected to go live this quarter. I guess, what's the remaining spend to completion, and when should we expect to see the net maintenance cost savings to fully materialize?

Speaker #3: Yeah . So we'll see the number to be slightly higher in this coming quarter as we're in that that that that final launch phase .

Barry Steele: Yeah. We'll see the number to be slightly higher in this coming quarter as we're in that final launch phase. A lot of activity is currently happening to get us ready, and we have extra help from our consultants on that as we bring actual real live transactions and convert over. That will be a little bit higher in Q1, but then it should taper down. It won't go to zero, though. As we look at the full benefit on a sort of annualized basis, if we compare the periods where we're doing the ERP to the future when we're not doing the actual implementation, it's about $2 million savings annually.

Speaker #3: A lot of activities currently happening to get us ready. And we have extra help from our consultants for that as we bring actual, real-life transactions and convert over.

Speaker #3: So that will be a little bit higher in the first quarter , but then it should taper down . It won't go to zero though , as we look at the full benefit on an annualized basis .

Speaker #3: If we compare the periods where we were doing the ERP to the future, when we're not doing the actual implementation, it's about $2 million in savings annually.

Speaker #3: So that's that's the spend that should come out where we do have some ongoing spend , higher maintenance costs , if you will , for the new system .

Barry Steele: That's the spend that should come out, where we do have some ongoing spend, a higher maintenance cost, if you will, for the new system. The net difference between, you know, between when we've been doing the implementation to the future is about $2 million in savings. What we expect sometime later in the year, 2026 or beyond, 2027, just is to start seeing some benefits as the new application starts to, you know, we get good at it, and we start to consolidate and see efficiencies for all the rest of the teams that are impacted by it. You may recall that we did the ERP because our old system was going to go away.

Speaker #3: So the net difference between , you know , between when we've been doing the implementation to the future is about 2 million in savings .

Speaker #3: What we expect sometime later in the year 2026 or beyond , 2027 is to start seeing some benefits as the new application starts to starts to , you know , we get good at it and we start to consolidate and see efficiencies for all the rest of the teams that are impacted by it .

Speaker #3: You may recall that we did the ERP because we our old system was was going to go away . It was being Discontinued by by Microsoft .

Barry Steele: It was being discontinued by Microsoft, so we had to do it. We would do see that there will be a payback and improvement in overall efficiencies and productivity, to pay for the system, the investment that we made.

Speaker #3: So we had to do it . But we would do see that there will be a payback and improvement in overall efficiency and productivity to pay for the system .

Speaker #3: The investment that we made .

Speaker #6: Okay. Got it. And then, are there any other costs associated with the transition of the RCM platform from Apollo to expand it into the oncology business?

Operator: Okay, got it. Then are there any other costs associated with the transition of the RCM platform from ApolloMD to expand it into the oncology business?

Anderson Schock: Okay, got it. Then are there any other costs associated with the transition of the RCM platform from ApolloMD to expand it into the oncology business?

Speaker #2: No , no , no additional costs . Again , that's up and running . We just you know , we're defining those processes to get oncology over there .

Carrie Lachance: No. No, no additional costs. Again, that system's up and running. We just, you know, we're defining those processes to get oncology over there. We use several systems today for the oncology work, so we're excited to get it moved into that new system, but no additional cost.

Speaker #2: We use several systems today for the oncology work . So we're excited to get it moved into that new system . But no additional costs

Operator: Yeah. Okay, got it. Then finally, do you have any updates on the Chemo Mouthpiece billing code approval or timing there?

Anderson Schock: Yeah. Okay, got it. Then finally, do you have any updates on the Chemo Mouthpiece billing code approval or timing there?

Speaker #6: Okay . Got it . And then finally , do you have any updates on the chemo mouthpiece billing code approval or timing ? There

Speaker #2: I do , unfortunately , I don't have any updates , meaning it was approved or not approved . What I would say is that we're in touch with them very frequently .

Carrie Lachance: I do. Unfortunately, I don't have any updates, meaning it was approved or not approved. What I would say is that we're in touch with them very frequently. We have weekly calls regarding kind of the momentum that we see and the interest in the products. We are seeing devices that are shipped out on a weekly basis. They don't have any new information based on their 17 December meeting with CMS, but they're continued to be encouraged. Again, there's product interest, and we're looking forward to. They were looking forward to maybe a February information back with approval or whatnot, but we haven't heard an update yet.

Speaker #2: We have weekly calls regarding kind of the momentum that we see and the interest in the products we are seeing devices that are shipped out on a weekly basis .

Speaker #2: They don't have any new information based on their December 17th meeting with CMS , but there continue to be encouraged . And again , there's product interest and we're looking forward to .

Speaker #2: They were looking forward to maybe a February information back with approval or or whatnot . But we haven't heard an update yet

Speaker #6: Okay . Got it .

Operator: Okay, got it.

Anderson Schock: Okay, got it.

Barry Steele: Yeah, I think I'd like to add to that, Kerry.

Speaker #3: I think I add to that Kerry just the the mouthpiece we kept that any revenue out out of the low end of our our guidance range .

Operator: Okay.

Anderson Schock: Okay.

Barry Steele: Just-

Operator: Sure.

Anderson Schock: Sure.

Barry Steele: To add to that. The Chemo Mouthpiece, we kept that any revenue out of the low end of our guidance range. We do believe that we'll see some revenue. It'll be one of the things that will help us get higher in the guidance range.

Speaker #3: So it will be, definitely, we do believe that we'll see some revenue. It'll be one of the things that will help us get higher in the guidance range.

Speaker #6: Okay. Got it. Thank you for taking our questions.

Operator: Okay, got it. Thank you for taking our questions.

Anderson Schock: Okay, got it. Thank you for taking our questions.

Speaker #7: Thank you

Carrie Lachance: Thank you.

Speaker #4: Thank you Your next question comes from Jim Sidoti with Fidelity and Company . Please go ahead

Glenn Axelrod: Thank you. Your next question comes from Jim Sidoti with Sidoti & Company. Please go ahead.

Operator: Thank you. Your next question comes from Jim Sidoti with Sidoti & Company. Please go ahead.

Speaker #8: Hi . Good . Good morning . Thanks for taking the question You mentioned that the expense reduction , related to the weaning GE contract will be greater than the 7.1 million in revenue reduction .

Jim Sidoti: Hi, good morning. Thanks for taking the question. You mentioned that the expense reduction, you know, related to the renegotiated GE contract will be greater than the $7.1 million in revenue reduction. Where will that show up on the income statement? Will we see that mostly in the gross margin?

Speaker #8: Where will that show up on the income statement ? Will we see that mostly in the gross margin

Speaker #3: Yep . It's gross margin . It's we restructured the team , so we had to take some some team members out of the the program .

Barry Steele: Yep, it's gross margin. That's, we restructured the team, so we had to take some team members out of the program. Things like, we'd have to pay for the parts for repairs, at least not the, in the field. There's a lot of costs that come out of the cost of sales line, as we see the revenue come down.

Speaker #3: And things like we'd have to pay for the parts for for repairs , at least not in the field . So there's a lot of costs that come out of the cost of sales line as we as we see the revenue come down .

Speaker #8: All right . And in addition to I think you said expenses should come down about 2 million because of the change in or because of the ERP completion .

Jim Sidoti: All right. In addition to, I think you said, expenses should come down about $2 million because of the change in, or because of the ERP completion. You know, you said on an annual basis, they should come down about $2 million.

Speaker #8: You said on an annual basis they should come down about 2,000,000 in 2025 . You had some expenses related to the CEO transition .

Barry Steele: Yeah.

Jim Sidoti: In 2025, you had some expenses related to the CEO transition. Those should go away as well in 2026, right?

Speaker #8: Those should go away as well . In 2026 , right ?

Speaker #3: That's correct . Yeah , that was our added back for EBITDA but obviously not added back for our operating income or net income .

Barry Steele: That's correct. Yep, those are added back for Adjusted EBITDA, but obviously not added back for our operating income or net income. Correct.

Speaker #3: Correct .

Jim Sidoti: Oh, okay. You know, your cash flow generation's been getting stronger over the past couple of quarters, and it seems like it's going to continue to improve. You've been paying down debt so far. Is that really the plan for cash, or do you have any other options that you think you might use your cash for in 2026 and 2027?

Speaker #8: Okay . And so your cash flow generation has been , you know , been getting stronger over the past couple of quarters . And it seems like it's going to continue to improve .

Speaker #8: You've been paying down debt . So far . Is that really the plan for cash or do you have any other any other options that you think you might ?

Speaker #8: Use your cash for in 2026 and 2027?

Speaker #3: Yeah , I would say that our our capital allocation priorities have not changed . Right . And we have a share buyback program , which is opportunistic in nature .

Barry Steele: Yeah, I would say that our capital allocation priorities have not changed, right? We have a share buyback program, which is opportunistic in nature. We want to buy back shares in periods where we have strong free cash flow, or we see, when we see the trading price is below what we view as intrinsic value. That will continue. Obviously, the paying down debt is very flexible for us because we have a revolving facility, which means that we can borrow it right back, so we don't give up commitments. Then there's obviously we want to invest in the business, right? We see, we want to be a top line grower. M&A, we've done some M&A in the past and could be the future.

Speaker #3: We want to buy back shares in periods where we have strong free cash flow or we see and and when we see the the trading prices below , what we view as intrinsic value , so that will continue .

Speaker #3: Obviously , the paying down debt is very , very flexible for us because we have a revolving facility , which means that we can borrow it right back so we don't give up commitments .

Speaker #3: And then there's obviously we want invest in the business , right ? We see we want to keep that line grower and M&A .

Speaker #3: We've done some M&A in the past and could be the future . I don't care if you want to expand on that , but yeah , I think our our our priorities are about the same as they have been .

Barry Steele: I don't know, Carrie, if you want to expand on that, but, yeah, I think our sort of our priorities are about the same as they have been.

Speaker #8: Okay . All right . Thank you .

Jim Sidoti: Okay. All right. Thank you.

Speaker #2: Thanks .

Speaker #7: Jim

Carrie Lachance: Thanks, Jim.

Speaker #4: Thank you . Your next question comes from Matt Hewitt with Craig-hallum . Please go ahead .

Glenn Axelrod: Thank you. Your next question comes from Matthew Hewitt with Craig-Hallum. Please go ahead.

Operator: Thank you. Your next question comes from Matthew Hewitt with Craig-Hallum. Please go ahead.

Speaker #9: Good morning . This is Tom Corman on for Matt Hewitt . So kind of just general here . Are there are there any other low margin businesses you're considering exiting or just opportunities to drive more efficiency ?

Operator: Good morning, this is Tav Korman on for Matthew Hewitt. Kind of just general here, are there any other low-margin businesses you're considering exiting or just opportunities to drive more efficiency? Thank you.

Taav Cooperman: Good morning, this is Tav Korman on for Matthew Hewitt. Kind of just general here, are there any other low-margin businesses you're considering exiting or just opportunities to drive more efficiency? Thank you.

Speaker #9: Thank you

Speaker #2: I don't think there's any other really low margin areas that we're looking at today . We will continue to look at , you know , from a biomed perspective , if there's if there's , you know , we have a much smaller team today from from a nationwide aspect of the number of technicians .

Carrie Lachance: I don't think there's any other really low-margin areas that we're looking at today. We will continue to look at, you know, from a biomed perspective, if there's, you know, we have a much smaller team today from a nationwide aspect of the number of technicians. We will try to keep it to a regional, kind of the work that we're doing in the biomed space, to a regional area, unless we see good pricing that, you know, we can kind of afford to fly people all over the place. I think otherwise, we don't have any low-margin areas that we're looking to kind of exit from.

Speaker #2: So we will try to keep it to a regional kind of the work that we're doing in the in the biomed space to a regional area , unless we see good pricing , that we can kind of afford to fly people all over the place .

Speaker #2: So I think other otherwise we don't have any low margin areas that we're looking to kind of exit from .

Speaker #9: Great .

Operator: Great. Thank you.

Taav Cooperman: Great. Thank you.

Speaker #7: Thank you. Yeah, thanks. So,

Carrie Lachance: Yeah. Thanks, Ralph.

Speaker #4: Thank you . Your next question comes from Benjamin Haner with Lake Street Capital Markets . Please go ahead

Glenn Axelrod: Thank you. The next question comes from Ben Haynor with Lake Street Capital Markets. Please go ahead.

Operator: Thank you. The next question comes from Ben Haynor with Lake Street Capital Markets. Please go ahead.

Speaker #10: Good morning folks . Thanks for taking the questions . First off , for me , I know the subject has been already touched on a bit , but was just curious on the wound care cost efficiency and maybe how you see that tracking throughout the year

Ben Haynor: Good morning, folks. Thanks for taking the questions. First off, for me, I know the subject's been already touched on a bit, but was just curious on the wound care cost efficiency and, you know, maybe how you see that tracking throughout the year.

Speaker #2: I would say from the from the new system , you know , it's allowing us to ramp , bring in volume . It's much more efficient system .

Carrie Lachance: I would say from the new system, you know, it's allowing us to ramp, bring in volume. It's a much more efficient system. We're using multiple systems to before. It's allowing us to bring in more products. Again, we've saw some really good benefit from the with PCDs. We were able to ramp that relatively quickly. We expect that to continue to grow over the course of the year, as well as adding new products. Hopefully that.

Speaker #2: We're using multiple systems before . So it's allowing us to bring in more products . Again , we saw some some really good benefit from with Pcds , we're able to ramp that relatively quickly .

Speaker #2: We expect that to continue to grow over the the course of the year , as well as adding new products . So

Speaker #7: Hopefully that yeah .

Speaker #3: I would add to that by just saying that that that the wound care hasn't been a lot of cost actually in our pal , the costs that we see in order to grow it has been a barrier and we've been able to move that barrier out of the way .

Barry Steele: Yeah, I would add to that, Carrie, by just saying that the wound care hasn't been a lot of cost actually in our P&L. The cost that we see in order to grow it has been a barrier, and we've been able to move that barrier out of the way. You won't see a necessarily decrease in our cost because we didn't go and incur them, but now we'll be able to grow the wound care at a more efficient pace, if that makes sense.

Speaker #3: So you won't see a necessarily decrease in our cost because we didn't we didn't go and incur them . But now we'll be able to grow the wound care and more efficient pace .

Speaker #3: If that makes sense .

Speaker #10: Okay . That's helpful . And then just lastly for me on the DME , new products , can you share what categories those are in at all or is that something we should be staying tuned for ?

Ben Haynor: Okay, that's helpful. Just lastly for me on the DME new products, can you share what categories those are in at all, or is that something we should be staying tuned for?

Speaker #2: You know , I would say from an accreditation standpoint , I'm happy to share . We were accredited for a few new products .

Carrie Lachance: You know, I would say from an accreditation standpoint, I'm happy to share. We were accredited for a few new products. One is called the Foot Defender, one is called HidraWear in the ostomy category. We, you know, got accredited for some of those codes. We see some interest in some of those products. We've been approached by some folks with some of those products. I would say as a whole, we, I would typically not love to share. We wanna prove out what we're doing before we, you know, set expectations on that. We really wanna prove out that it's working for us, reimbursement is working. We are working with some companies here to take a look at this, see if it's gonna be a good opportunity for us.

Speaker #2: One is called the Defender Boot , one is called Hydro , where and the ostomy category . So we we you know , got accredited for some of those codes .

Speaker #2: We see some interest in some of those products . We've been approached by some folks with some of those products . I would say as a whole , we we I would typically not love to , to share .

Speaker #2: We want to prove out what we're doing before we, you know, set expectations on that. We really want to prove out that it's working for us.

Speaker #2: Reimbursement is working , so we are working with some companies here to to take a look at this , see if it's going to be a good opportunity for us .

Speaker #2: And as we are successful in those areas , we'll we'll continue to share more information .

Carrie Lachance: As we are successful in those areas, we'll continue to share more information.

Speaker #10: Fair enough. Thanks for taking the questions, and congrats on the quarter and the progress.

Ben Haynor: Fair enough. Thanks for taking the questions, congrats on the quarter and the progress.

Speaker #7: Thank you . Have a great day

Carrie Lachance: Thank you. Have a great day.

Speaker #4: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Carrie Lachance for any closing remarks.

Glenn Axelrod: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Carrie Lachance for any closing remarks.

Operator: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Carrie Lachance for any closing remarks.

Speaker #2: Thank you everyone for joining today's call . We look forward to speaking with you again on our first quarter call , where we will provide an update on our results and progress

Carrie Lachance: Thank you, everyone, for joining today's call. We look forward to speaking with you again on our Q1 call, where we will provide an update on our results and progress.

Glenn Axelrod: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Operator: Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Q4 2025 InfuSystem Holdings Inc Earnings Call

Request a DemoDemo

INFU

InfuSystem

Earnings