Q2 2026 InfuSystem Holdings Inc Earnings Call

August 4, 2026

Speaker #1: Good morning, and welcome to the Infuse System Holdings Inc report's second quarter fiscal year 2026 financial results conference call. All participants will be in listen-only mode.

Operator: Good morning, welcome to the InfuSystem Holdings, Inc. Reports Second Quarter Fiscal Year 2026 Financial Results Conference Call. All participants will be in listen-only mode. 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. 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. I would now like to turn the conference over to Glen Akselrod, investor relations. Please go ahead.

Operator 1: Good morning, welcome to the InfuSystem Holdings, Inc Reports Second Quarter Fiscal Year 2026 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key, followed by zero.

Speaker #1: Should you need assistance, please signal the conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Operator 1: After today's presentation, there will be an opportunity to ask questions. 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. I would now like to turn the conference over to Glen Akselrod, investor relations. Please go ahead.

Speaker #1: To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded.

Speaker #1: I would now like to turn the conference over to Glenn Axelrod, Investor Relations. Please go ahead.

Speaker #2: Good morning, and thank you for joining us today to review Infuse System's second quarter 2026 financial results and the June 30, 2026. With us today on the call are Carrie Lachance, Chief Executive Officer; and Barry Steele, Chief Financial Officer.

Glen Akselrod: Good morning. Thank you for joining us today to review InfuSystem's Q2 2026 financial results ended 30 June 2026. With us today on the call are Carrie 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 Private Securities Litigation Reform Act of 1995. Except for 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 on Form 10-K for the year ended 31 December 2025.

Speaker #2: 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 Infuse System during this conference call constitute forward-looking statements within the meaning of private securities litigation reform act of 1995, except for 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 on form 10-K for the year ended December 31, 2025.

Glen Akselrod: Except for 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 on Form 10-K for the year ended 31 December 2025.

Speaker #2: 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.

Glen Akselrod: 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 #2: Infuse 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 #2: Carrie.

Speaker #3: Thank you, Glenn. And good morning, everyone. Welcome to Infuse System's second quarter fiscal year 2026 earnings call. Thank you all for joining us today.

Carrie LaChance: Thank you, Glenn. Good morning, everyone. Welcome to InfuSystem's Q2 fiscal year 2026 earnings call. Thank you all for joining us today. I will provide a Q2 overview highlighting our progress in the quarter. Barry will provide a detailed summary of our financial results. I will then come back with some closing comments before opening the line to questions. During the 2026 Q2, we made measurable progress in our efforts to drive revenue growth and to improve our operational capacity and efficiency to make the revenue growth more profitable. This morning, we reported Q2 2026 revenue of $36.9 million. This represented a new quarterly record, an increase from the prior year of just over $1 million, or 2.6% on a GAAP basis, and a 7.5% increase on a non-GAAP pro forma basis.

Speaker #3: I will provide a second quarter overview, highlighting our progress in the quarter. Then, Barry will provide a detailed summary of our financial results. I will then come back with some closing comments.

Speaker #3: Before opening the line to questions. During the 2026 second quarter, we made measurable progress in our efforts to drive revenue growth and to improve our operational capacity and efficiency.

Carrie LaChance: During the 2026 Q2, we made measurable progress in our efforts to drive revenue growth and to improve our operational capacity and efficiency to make the revenue growth more profitable. This morning, we reported Q2 2026 revenue of $36.9 million. This represented a new quarterly record, an increase from the prior year of just over $1 million, or 2.6% on a GAAP basis, and a 7.5% increase on a non-GAAP pro forma basis.

Speaker #3: To make the revenue growth more profitable. This morning, we reported second quarter 2026 revenue of $36.9 million. This represented a new quarterly record, and an increase from the prior year of just over $1 million, or 2.6% on a GAAP basis, and a 7.5% increase on a non-GAAP pro forma basis.

Speaker #3: On a gap basis, the increase was achieved despite the impact of restructuring of our biomedical services contract with GE Healthcare. Which reduced revenue by $1.6 million during the second quarter, and is the basis for the adjustment to providing pro forma revenue growth.

Carrie LaChance: On a GAAP basis, the increase was achieved despite the impact of restructuring of our biomedical services contract with GE HealthCare, which reduced revenue by $1.6 million during the Q2 and is the basis for the adjustment to providing pro forma revenue growth. As previously mentioned, this restructuring improves our earnings because it allowed for an even larger reduction in direct contract expenses. As a result of the increased revenue and the benefits of the GE restructuring and other initiatives, we generated approximately $8.6 million in adjusted EBITDA this quarter, representing a 7.6% increase over the prior year and resulting in an increase of more than 1% in our EBITDA margin, which came in at 23.4%. These results were driven by both continued steady growth in our core oncology business and accelerating growth in wound care.

Speaker #3: As previously mentioned, this restructuring improves our earnings because it allowed for an even larger reduction in direct contract expenses. As a result of the increased revenue, and the benefits of the GE restructuring and other initiatives, we generated approximately $8.6 million in adjusted EBITDA this quarter, representing a 7.6% increase over the prior year and resulting in an increase of more than 1% in our EBITDA margin, which came in at $23.4%.

Carrie LaChance: As a result of the increased revenue and the benefits of the GE restructuring and other initiatives, we generated approximately $8.6 million in adjusted EBITDA this quarter, representing a 7.6% increase over the prior year and resulting in an increase of more than 1% in our EBITDA margin, which came in at 23.4%. These results were driven by both continued steady growth in our core oncology business and accelerating growth in wound care.

Speaker #3: These results were driven by both continued steady growth in our core oncology business and accelerating growth in wound care. Quarterly oncology revenue surpassed the $20 million mark for the first time during the second quarter and grew 6.4% over the prior year.

Carrie LaChance: Quarterly oncology revenue surpassed the $20 million mark for the first time during Q2 and grew 6.4% over the prior year, further extending our large share of the outpatient oncology ambulatory infusion market, where we serve 18 of the top 20 US hospital systems. Within wound care, compression devices for lymphedema patients represent the main growth driver. In total, wound care net revenue grew by $2.1 million, or 154% year over year during Q2. Compression devices represented nearly 90% of that increase. As the newest offering in our portfolio, added less than a year ago during last year's Q3, we are pleased with the growth and partnerships that we have in place today.

Speaker #3: Further extending our large share of the outpatient oncology ambulatory infusion market, where we serve 18 of the top 20 U.S. hospital systems. Within wound care, compression devices for lymphedema patients represent the main growth driver.

Speaker #3: In total, wound care net revenue grew by 2.1 million dollars or 154% year over year during the second quarter. Compression devices represented nearly 90% of that increase.

Carrie LaChance: In total, wound care net revenue grew by $2.1 million, or 154% year over year during Q2. Compression devices represented nearly 90% of that increase. As the newest offering in our portfolio, added less than a year ago during last year's Q3, we are pleased with the growth and partnerships that we have in place today.

Speaker #3: As the newest offering in our portfolio, added less than a year ago during last year's third quarter, we are pleased with the growth and partnerships that we have in place today.

Speaker #3: We are now working with two manufacturers, which brings us a breadth of product offerings covering both pneumatic compression devices, or PCDs, which use sequential compression technology, and adjustable compression wraps, which feature Velcro closures that are easier for patients with limited mobility as compared to traditional products, such as compression stockings.

Carrie LaChance: We are now working with two manufacturers, which bring us a breadth of product offerings covering both pneumatic compression devices, or PCDs, which use sequential compression technology, and adjustable compression wraps, which feature Velcro closures that are easier for patients with limited mobility as compared to traditional products such as compression stockings. This new product line is expected to continue to drive near-term growth with these existing suppliers while also opening up potential opportunities by adding additional manufacturing relationships in the future. We believe our capabilities and payer contract portfolio make us an attractive DME partner to current and potential future manufacturing partners. Less noticeable in the current period results is continued progress on our new enterprise resource planning application, or ERP, and other business applications that we've been updating.

Speaker #3: This new product line is expected to continue to drive near-term growth with these existing suppliers while also opening up potential opportunities by adding additional manufacturing relationships in the future.

Speaker #3: We believe our capabilities and payer contract portfolio make us an attractive DME partner to current and potential future manufacturing partners. Less noticeable in the current period results, is continued progress on our new enterprise resource planning application, or ERP.

Speaker #3: And other business applications that we've been updating. During our first quarter call, we reported that our new ERP was launched successfully, and that we were continuing to work to stabilize certain areas of the system.

Carrie LaChance: During our Q1 call, we reported that our new ERP was launched successfully and that we were continuing to work to stabilize certain areas of the system. During Q2, we made significant progress towards that effort and as a result, brought down the spending rate. While refinement and enhancement work continues, we see additional opportunities and are laser-focused on using the new application to drive improved capacity and efficiencies in the many processes that operate in that application. After adjusting for the expected $7.1 million lower annual revenue related to the GE HealthCare contract restructuring, on a pro forma basis, we continue to anticipate annual revenue growth in a range of 6% to 8%.

Speaker #3: During the second quarter, we made significant progress towards that effort, and as a result, brought down the spending rate. While refinement and enhancement work continues, we see additional opportunities and are laser-focused on using the new application to drive improved capacity and efficiencies in the many processes that operate in that application.

Speaker #3: As we look towards the second half of the year, and after adjusting for the expected 7.1 million dollar lower annual revenue related to the GE Healthcare contract restructuring, on a pro forma basis, we continue to anticipate annual revenue growth in a range of 6 to 8 percent.

Speaker #3: Additionally, we continue to anticipate that our adjusted EBITDA margin will remain in the low to mid 20 percent range, consistent with our longer-term target of a 22 percent to 25 percent margin.

Carrie LaChance: We continue to anticipate that our adjusted EBITDA margin will remain in the low to mid 20% range, consistent with our longer-term target of a 22% to 25% margin. This is inclusive of the impact of costs related to our information technology systems upgrades. We are excited about the opportunities ahead and will look to update you again in future quarters. I'll turn it over to Barry for a detailed review of the Q2 financial results. Barry?

Carrie LaChance: Additionally, We continue to anticipate that our adjusted EBITDA margin will remain in the low to mid 20% range, consistent with our longer-term target of a 22% to 25% margin. This is inclusive of the impact of costs related to our information technology systems upgrades. We are excited about the opportunities ahead and will look to update you again in future quarters. I'll turn it over to Barry for a detailed review of the Q2 financial results. Barry?

Speaker #3: This includes the impact of costs related to our information technology systems upgrades. We are excited about the opportunities ahead and will look to update you again in future quarters.

Speaker #3: Now, I'll turn it over to Barry for a detailed review of the second quarter financial results. Barry.

Speaker #2: Thank you, Carrie. And thank you, everyone on the call, for joining us today. As Carrie mentioned, second quarter revenue increased 2.6% to $36.9 million, compared to $36.0 million in the prior year.

Barry Steele: Thank you, Carrie, and thank you everyone on the call for joining us today. As Carrie mentioned, Q2 revenue increased 2.6% to $36.9 million, compared to $36 million in the prior year. Importantly, this result includes a $1.6 million reduction in biomedical services revenue from the restructuring of our GE HealthCare contract. Excluding that impact, revenue growth would have been approximately 7.5% year over year, demonstrating continued strength in our core operations. Patient services continued to perform exceptionally well, with revenue increasing 15.2% to $24.8 million. That included oncology revenue, which grew 6.4%, or $1.2 million, driven by higher treatment volumes and improved reimbursement collections. While wound care revenue increased by 154%, or $2.1 million, benefiting from the successful launch and expansion of pneumatic compression devices and adjustable compression wraps.

Speaker #2: Importantly, this result includes a 1.6 million reduction in biomedical services revenue from the restructuring of our GE Healthcare contract. Excluding that impact, revenue growth would have been approximately 7.5% year over year, demonstrating continued strength in our core operations.

Speaker #2: Patient services continue to perform exceptionally well, with revenue increasing 15.2% to $24.8 million. That includes oncology revenue, which grew 6.4%, or $1.2 million, driven by higher treatment volumes and improved reimbursement collections, while wound care revenue increased by 154%, or $2.1 million, benefiting from the successful launch and expansion of pneumatic compression devices and adjustable compression wraps.

Speaker #2: Device solutions revenue declined by 16.1% to $12.1 million primarily due to the planned reduction in biomedical services revenue associated with the GE Healthcare contract restructuring and a 49% decline in equipment sales, resulting from a large rental customer buyout that occurred last year.

Barry Steele: Device solutions revenue declined by 16.1% to $12.1 million, primarily due to the planned reduction in biomedical services revenue associated with the GE HealthCare contract restructuring and a 49% decline in equipment sales resulting from a large rental customer buyout that occurred last year. However, despite the lower revenue, device solutions gross profit remained stable at approximately $6.1 million, reflecting significantly improved profitability. Consolidated gross profit increased 7.7% to $21.4 million, while gross margin expanded to 58% from 55.2% last year, an improvement of 2.8%. This margin improvement was largely driven by device solutions where gross margin increased to 50.2% from 41.9%, an improvement of 8.3%. The GE contract restructuring alone improved device solutions margin by approximately 4.8%, while procurement initiatives, productivity improvements, and a favorable revenue mix provided additional benefits.

Speaker #2: However, despite the lower revenue, device solutions gross profit remained stable at approximately $6.1 million reflecting significantly improved profitability. Consolidated gross profit increased 7.7% to $21.4 million while gross margin expanded to 58% from $55.2% last year, an improvement of 2.8%.

Speaker #2: This margin improvement was largely driven by device solutions where gross margin increased to $50.2% from $41.9%, an improvement of 8.3%. The GE contract restructuring alone improved device solutions margin by approximately 4.8%.

Speaker #2: While procurement initiatives productivity improvements and a favorable revenue mix provided additional benefits. And patient services gross profit increased 10.9% to $15.3 million its higher revenue more than offset a modest decline in gross margin to $61.8% from $64.2%, a decrease of 2.4%.

Barry Steele: In patient services, gross profit increased 10.9% to $15.3 million as higher revenue more than offset a modest decline in gross margin to 61.8% from 64.2%, a decrease of 2.4%. The margin decline was primarily attributable to a larger mix of wound care revenue, which carries lower margins than our oncology business, and increased pump maintenance costs in the segment. Net income increased to $3.2 million, or $0.15 per diluted share, compared to $2.6 million, or $0.12 per diluted share a year ago. Adjusted EBITDA increased 7.6% to $8.6 million, representing 23.4% of revenue, compared to $8 million or 22.3% of revenue in the prior year period. While we continued investing in growth, operating expenses increased as expected. Selling and marketing expenses increased 10.5% to $3 million, reflecting additional sales resources and higher travel costs.

Speaker #2: The margin decline was primarily attributable to a larger mix of wound care revenue, which carries lower margins than our oncology business, and increased pump maintenance costs in the segment.

Speaker #2: Net income increased to $3.2 million or 15 cents per diluted share compared to $2.6 million or 12 cents per diluted share a year ago.

Speaker #2: Adjusted EBITDA increased 7.6% to 8.6 million representing 23.4% of revenue compared to 8 million or 22.3% of revenue in the prior year period. While we continued investing in growth, operating expenses increased as expected.

Speaker #2: Selling and marketing expenses increased 10.5% to $3.0 million, reflecting additional sales resources and higher travel costs. G&A expense increased 7.2% to $14.1 million, driven by higher stock-based compensation, wage inflation, healthcare costs, and investments to support our expanding patient services business.

Barry Steele: G&A expense increased 7.2% to $14.1 million, driven by higher stock-based compensation, wage inflation, healthcare costs, and investments to support our expanding patient services business. Spending on our new ERP decreased sequentially as we anticipated and was focused on post-go-live stabilization and enhancement activities. From a cash flow and balance sheet perspective, we generated $7.7 million of operating cash flow during H1, invested $6.5 million in rental equipment to support growth, and returned $4.4 million to shareholders through share repurchases. We ended the quarter with $55.2 million of available liquidity, including $54.2 million of revolver availability and maintain a conservative leverage profile with net debt of $19.5 million, representing only 0.61 times trailing 12-month adjusted EBITDA.

Speaker #2: Spending on our new ERP decreased sequentially, as we anticipated and was focused on post-GoLive stabilization and enhancement activities. From a cash flow and balance sheet perspective, we generated $7.7 million of operating cash flow during the first six months of the year, invested $6.5 million in rental equipment to support growth, and returned $4.4 million to shareholders through share repurchases.

Speaker #2: We ended the quarter with 55.2 million of available liquidity including 54.2 million of revolver availability and maintained a conservative leverage profile with net debt of 19.5 million representing only 0.61 times trailing 12 months adjusted EBITDA.

Speaker #2: This financial flexibility supports both our continued investment in organic growth and selective tuck-in acquisitions. I will now turn the call back over to Carrie.

Barry Steele: This financial flexibility supports both our continued investment in organic growth and selective tuck-in acquisitions. I will now turn the call back over to Carrie.

Speaker #3: Thanks, Barrie. As we reflect on our second quarter progress, the update shared today. And our priorities through the remainder of 2026. We remain focused on the strategic objectives we previously outlined for shareholders.

Carrie LaChance: Thanks, Barry. As we reflect on our Q2 progress, the updates shared today, and our priorities through the remainder of 2026, we remain focused on the strategic objectives we previously outlined for shareholders. Executing with discipline, delivering profitable growth, and driving long-term value creation. Underpinning that is a diversified, de-risked revenue base, where no single customer represents more than 10% of our revenue. Our Medicare exposure remains below 10%, and our 800-plus payer contracts cover more than 97% of US insured lives, providing strong visibility and predictability. Operator, we are ready for the Q&A portion of the call.

Speaker #3: Executing the discipline, delivering profitable growth, and driving long-term value creation. Underpinning that is a diversified, de-risked revenue base, where no single customer represents more than 10% of our revenue, our Medicare exposure remains below 10%, and our 800-plus payer contracts cover more than 97% of U.S. insured lives, providing strong visibility and predictability.

Speaker #3: Operator, we are ready for the Q&A portion of the call.

Speaker #4: We will now begin 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.

Operator: We will now begin 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. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from James Sidoti with Sidoti & Company. Please go ahead.

Speaker #4: To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Jim Sadati with Sadati & Company.

Speaker #4: Please go ahead.

Speaker #5: Hi, good morning. Thanks for taking the question. The oncology business continues to perform very well, up 6% in the quarter. Is that something you think is sustainable?

James Sidoti: Hi, good morning. Thanks for taking the question. The oncology business, it continues to perform very well, up 6% in the quarter. Is that something you think is sustainable?

Speaker #6: Hi, good morning, Jim. Thanks for the question. I think we've continued to see a little bit higher than that single kind of lower digit growth over the years.

Carrie LaChance: Hi, good morning, Jim. Thanks for the question. I think we've continued to see a little bit higher than that single lower digit growth over the years. We're seeing certain some great volume. We've added some new customers this year, and then our collections and reimbursements improvements are also contributing to that. I do think it's pretty sustainable moving forward.

Speaker #6: We're seeing some great volume. We've added some new customers this year, and then our collections and reimbursement improvements are also contributing to that.

Speaker #6: So I do think it's pretty sustainable moving forward.

Speaker #5: Yeah, and the other big the other big surprise to me was the I guess it's the lymphedema business that's really boosting sales for the wound care business.

James Sidoti: Yeah. The other big surprise to me was the lymphedema business that's really boosting sales to the wound care business. Is that correct? Is that really the product that's growing? Is that something that continues to grow throughout the course of 2026 and into 2027?

Speaker #5: Is that correct? Is that really the product that's growing and is that something that you continues to grow throughout the course of 2026 and into 2027?

Speaker #6: Yeah, we've seen great success growing. We have a couple new partners there. As we've talked about in the past, I think we're 154% growth.

Carrie LaChance: Yeah, we've seen great success growing. We have a couple new partners there. As we've talked about in the past, I think we're 154% growth. We continue to see volume coming in that is improving, and we continue to foresee that happening through the remainder of 2026 and certainly beyond. Yes, I would expect some continued growth there.

Speaker #6: So we continue to see volume coming in. That is improving, and we continue to foresee that happening through the remainder of 2026. And certainly beyond.

Speaker #6: So yes, I would expect some continued growth there.

Speaker #5: And the big difference between this time with lymphedema and when you tried to get into that market a couple years ago is that the contracts or the product or why is it so strong this time?

James Sidoti: The big difference between this time with lymphedema and when you tried to get into that market a couple years ago, is that the contracts or the product? Why is it so strong this time?

Speaker #6: Yeah, I would say it's certainly the partnerships. Again, we were in this a few years ago. We have to have a good partner that's going to get us the paperwork that we need to be able to submit claims.

Carrie LaChance: Yeah, I would say it's certainly the partnerships. Again, we were in this a few years ago. We have to have a good partner that's going to get us the paperwork that we need to be able to submit claims. That process just has to work really well. We struggled in that in the past. We've learned a lot since then. We have a couple of new partners on board. As I said, we continue to work on looking for additional partners as well. That's really the key. If you have a really good partner that's going to get you all of the paperwork and work with their patients and their clinics to make sure that you have what you need is perfect.

Speaker #6: And that process just has to work really well. We struggled in that in the past. We've learned a lot since then. We have a couple new partners on board, as I said.

Speaker #6: We continue to work on looking for additional partners as well, and that's really the key. If you have a really good partner that's going to get you all of the paperwork, and work with their patients and their clinics to make sure that you have what you need, it's perfect.

Speaker #6: I think in additional piece of that is that patient lymphedema treatment act that was enacted in 2024, really, I think we saw take off in '25.

Carrie LaChance: I think an additional piece of that is that Patient Lymphedema Treatment Act that was enacted in 2024, really, I think we saw take off in 2025. That's seeing the whole market really is growing and that which is great for patients, right? That's a needed treatment and necessary. The reimbursement around that has been very helpful.

Speaker #6: That's seeing the whole market really is growing, which is great for patients, right? That's a needed treatment, and the reimbursement around that has been very helpful.

Speaker #5: All right. And then just a couple more. The decline in ERP expenses, I think you said that was about $300,000. Is that year-over-year, and do you think that number grows as the year progresses, or do you think you'll make increased investments in the ERP system?

James Sidoti: All right. Then just a couple more. The decline in ERP expenses, I think you said that was about $300,000. Is that year-over-year? Do you think that number grows as the year progresses, or do you think you'll make increased investments in the ERP system?

Speaker #7: Yeah, it was a sequential decrease. We highlighted that because this is the post-GoLive period where we're kind of just refining things. It definitely was a significant and larger decrease from the prior year where we're still in the process of going through the implementation phase.

Barry Steele: Yeah, it was a sequential decrease. We highlighted that because this is the post go-live period where we're kind of just refining things. It definitely was a significant and larger decrease from the prior year, while we're still in the process of going through the implementation phase. We do expect it to continue to taper down. As we've launched it, there's tons of opportunities to improve our processes and even enhance it. It probably won't go to zero because we see great opportunities to make investments that give us real efficiency and cost improvement savings. It should taper down and certainly be more of the enhancement type of spend as opposed to stabilization spend.

Speaker #7: We do expect it to continue to taper down. As we've launched it, there's tons of opportunities to improve our processes and even enhance it.

Speaker #7: So it probably won't go to zero because we see great opportunities to make investments that give us real efficiency and cost improvement savings. But it should taper down and of event as opposed to stabilization spend.

Speaker #5: So how did it compare the ERP spending this quarter to the year-over-year quarter?

James Sidoti: How did we compare the ERP spending this quarter to the year-over-year quarter?

Speaker #7: I think it was about half. I think we're about $600 to $600, $700,000 last year, and we're in the $300,000 range this quarter. So it's significant.

Barry Steele: I think it was about half. They were about $600,000 to $700,000 last year, and we're in the $300,000 range this quarter.

James Sidoti: Okay. That $300,000, that's a year-over-year number.

Speaker #5: Okay. So that $300,000 is a that's a year-over-year number.

Speaker #7: Yep.

Barry Steele: Yeah.

Speaker #5: Okay. And any changes on pain management? I know there was some new reimbursement there.

James Sidoti: Okay. Any changes on pain management? I know there was some new reimbursement there.

Speaker #6: Yeah, no, we continue to be relatively steady. From a pain management, that's the no pain act, the two devices that we use in that platform.

Carrie LaChance: Yeah, no, we continue to be relatively steady from a pain management. That's the NO PAIN Act, the two devices that we use in that platform were both added to that program. We continue to be steady. We haven't won significant amount of new customers. We have added a few with that from a reimbursement perspective. I would consider it's going to be relatively stable.

Speaker #6: We're both added to that program. So we continue to be steady. We haven't won significant amount of new customers. We have added a few with that from a reimbursement perspective.

Speaker #6: So I would consider it's going to be relatively stable.

Speaker #5: Okay. All right. And then last one for me. You seem to be doing very well with the wound management business. The oncology business seems to be doing well.

James Sidoti: Okay. All right. Last one for me. You seem to be doing very well with the wound management business. The oncology business seems to be doing well. Do you have enough on your plate right now, or you look to expand into any other markets?

Speaker #5: Do you have enough on your plate right now or do you look to expand into any other markets?

Speaker #6: Yeah, I wouldn't expect any expansion. We always have our eye out for what makes sense for Infusystem if we have a new manufacturer or a partner that has come to us asking for some help.

Carrie LaChance: Yeah, I wouldn't expect any expansion. We always have our eye out for what makes sense for InfuSystem if we have a new manufacturer or partner that has come to us asking for some help, which does tend to happen. We do have a lot on our plate right now. We're excited about the compression market. We see the growth there. We want to continue to focus there and enjoy that growth.

Speaker #6: Which does tend to happen. So but we do have a lot on our plate right now. We're excited about the compression market. We see the growth there.

Speaker #6: We want to continue to focus there and enjoy that growth.

Speaker #5: Okay. Thank you.

James Sidoti: Great. Thank you.

Speaker #6: Yeah, thanks, Jim.

Carrie LaChance: Yeah. Thanks, Jim.

Speaker #2: The next question is from Matt Hewitt with Craig Hallam Capital Group. Please go ahead.

Operator: The next question is from Matt Hewitt with Craig-Hallum Capital Group. Please go ahead.

Speaker #3: Hello, and thank you for taking the questions. This is Tolf Corman on for Matt Hewitt. One quick one from us. So, you mentioned your long-term adjusted EBITDA margin target.

Tal Cohen: Hello, and thank you for taking the questions. This is Tal Cohen for Matt Hewitt. One quick one from us. You mentioned your long-term adjusted EBITDA margin target. Could you provide a timeframe for us on that? Thank you.

Speaker #3: Could you provide a timeframe for us on that? Thank you.

Speaker #7: Yeah. So, we obviously didn't give a timeframe, but we think that there's probably more upside than downside as we work within that range. Clearly, the growth has definitely helped; some of the new products are a little bit lower gross margin, but we see opportunities to— it would be accretive to the EBITDA margins, and there's work to do there.

Barry Steele: Yeah. We obviously didn't give a timeframe, but we think that there's probably more upside than downside as we work within that range. That clearly the growth is definitely helping. Some of the new products are a little bit lower gross margin, but we see opportunities to be accretive to the EBITDA margin, some work to do there. As we step back, we do see opportunities to take costs out generally, the ERP improving processes and things like that. Wouldn't want to pin any specific time to it, but I think it's within the next two or three years probably, for us to be able to work up in that range. That's definitely what we're going to try to do.

Speaker #7: And as we step back, we do see opportunities to take costs out generally in the ERP improving processes. And things like that. So wouldn't want to pin any specific time to it, but I think it's within the next two or three years probably for us to be able to work up in that range.

Speaker #7: That's definitely what we're going to try to do.

Speaker #3: Great. Thank you very much.

Tal Cohen: Great. Thank you very much.

Speaker #6: Thanks, Tolf.

Barry Steele: Thanks, Tal.

Speaker #2: And the next question is from Benjamin Hainor with Lake Street Capital Markets. Please go ahead.

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

Speaker #4: Good morning, folks. Thanks for taking the questions. First off, for me on the lymphedema side of things, are you seeing anything specific with the prior authorization that CMS has put in place?

Ben Haynor: Good morning, folks. Thanks for taking the questions. First off for me on the lymphedema side of things, are you seeing anything specific with the prior authorization that CMS has put in place? I think it was in April. Is that any different than what you'd experienced earlier? Is it similar to what you've seen with private insurers? Any color on the impact there would be great.

Speaker #4: I think it was in April. Is that any different than what you'd experienced earlier? Is it similar to what you've seen with private insurers?

Speaker #4: Any color on the impact there would be great.

Speaker #6: Yeah, we haven't seen a significant change for us. Again, we're a little bit newer in the lymphedema space, so it's really just part of that process that we're developing with those new, as I said, our partnerships are really important.

Carrie LaChance: Yeah, we haven't seen a significant change for us. Again, we're a little bit newer in the lymphedema space, so it's really just part of that process that we're developing with those new, as I said, our partnerships are really important. For them to work with the clinics to make sure that we're getting all of the paperwork, including any kind of prior auth or anything is really the importance there. It has not impacted us tremendously. Obviously, we need all of the paperwork, as long as those partnerships and any that we continue moving forward, any new partners that we may be speaking to, that's part of that process. No big hits for us.

Speaker #6: So for our them to work with the clinics to make sure that we're getting all of the paperwork, including any kind of prior auth or anything, is really the importance there.

Speaker #6: So it has not impacted us tremendously. Obviously, we need all of the paperwork. So as long as that partnership and those partnerships and any that we continue moving forward, any new partners that we may be speaking to, that's part of that process.

Speaker #6: So no big hits for us.

Speaker #4: Okay. That makes sense. And then just on the ERP system, it sounds like that you may be starting to see some of the benefits.

Ben Haynor: Okay. That makes sense. Just on the ERP system, it sounds like you may be starting to see some of the benefits. Are there opportunities that you could call out that you think will make a really big difference? Any more color on how that's gone and how you see that going?

Speaker #4: Are there opportunities that you could call out that you think will make a really big difference? Any more color on how that's gone? And how you see that going?

Barry Steele: Yeah. What I would say is there's not any specific thing, but there's a lot of points of light, I'd say, in what we think we can do, and it's everything from managing working capital better to provide better cash flow as we grow to making push our throughput of devices and turning around devices to help us our utilization of devices. Clearly all the departments that are affected by the ERP, the processes are probably actually taking us a little longer today as we're still going through the learning curve, but we expect that we'd be able to reduce the effort that goes into a lot of different things that we do. It'll be across the board, I think.

Speaker #7: Yeah, what I would say is, there's not any specific thing, but there are a lot of points of light, I'd say, in what we think we can do.

Speaker #7: And it's everything from managing working capital better to provide better cash flow as we grow, to making our throughput of devices and turning around devices to help us with our utilization of devices.

Speaker #7: And clearly, all the departments that are affected by the ERP getting the process are probably actually taking us a little longer today as we're still going through the learning curve, but we expect that we'd be able to reduce the effort that goes into a lot of different things that we do.

Speaker #7: So it'll be across the board, I think. Again, working capital, you pump utilization, asset utilization as well as just lowering the need for team members and how long they'd have to do to get the jobs done.

Barry Steele: Again, working capital, pump utilization, asset utilization, as well as just lowering the need for team members and how long they have to do to get those jobs done.

Speaker #4: Okay. I think that's helpful. I think that's all I had. Thanks for taking the questions and congrats on the quarter.

Ben Haynor: Okay. No, that's helpful. I think that's all I had. Thanks for taking the questions and congrats on the quarter.

Speaker #6: Great. Thanks, Ben.

Barry Steele: Great. Thanks, Ben.

Speaker #2: This concludes our question and answer session. I would like to turn the conference back over to Carrie Lachance for any closing remarks.

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

Speaker #6: Thank you, Debbie. And thank you, everyone, for joining today's call. We look forward to speaking with you again on our third quarter call where we will provide an update on the results and progress.

Carrie LaChance: Thank you, Debbie. Thank you everyone for joining today's call. We look forward to speaking to you again on our Q3 call, where we will provide an update on results and progress.

Operator: This concludes our conference. Thank you for attending today's presentation. You may now disconnect.

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