InfuSystem Holdings, Inc. (AMEX:INFU) Q4 2022 Earnings Call Transcript

Richard DiIorio : Yes. The hope is that over time, we have a third and fourth and fifth supplier. So what we want to emulate is what we do in Oncology, which is we’re completely device agnostic. We carry every pump on the market for the Oncology patients. We’d like to get to that point or as close to that point in Wound Care as well. Cork was coming in as our second device before we heard from Cardinal that they were pulling theirs. So our #2 device moved up to #1 on the list. You can’t get new devices in overnight. It takes months. It doesn’t take years, but you have to go find the right product. You have to — we have to make sure it’s safe clinically. We have to sign the right agreement for the company. So we’ll have a second device this year, probably in a matter of a few months.

We’ll have some — a secondary supplier. And then the hope is not to stop there, right, to continue to look at the third and fourth as we progress. So yes, we have to solve that problem. We thought Cork was a solution in case something happen with Cardinal. Now we need something in place in case something else happens with Cork and continue down that path.

James Sidoti : So how long do you think it will take before you have another pump on the shelf?

Richard DiIorio : Yes. Good question. I think we’re talking to 3 or 4 companies now. They’re all in various phases. But I would say within the probably next quarter, it’s imminent that we’re going to have a second device. So it’s not too far off.

James Sidoti : Okay. And then you gave an annual revenue number. But if you look at the quarters in 2022, you’re basically $27 million every quarter until the fourth quarter and then it popped up to $29 million. Do you think in 2023, you’ll see more gradual growth quarter-over-quarter?

Barry Steele : Yes, that’s — main reason for that is the GE contract is the lion’s share of the growth we’re seeing. And as we add pumps continuously every month, it will gradually grow as we get through the year. And those are very easy comps because we had nothing in the first quarter last year. We had just a very small — actually nothing in the second quarter. So yes, it will be much more gradual as you see sequential increases in each quarter.

James Sidoti : All right. And do you think you’ll generate free cash flow in the year? And if you do, what do you think you’ll do with it? Will it be another stock buyback or you’d be paying down debt?

Barry Steele : Yes. Clearly, no question that we’d be generating free cash flow. We have consistently for at least 3 or 4 years. There’s no reason this year will be any different. Keep in mind that the growth is in not capital-intensive-type businesses, particularly the Biomedical Services. And what we do with it, I think that our capital allocation priorities haven’t changed. They’re primarily invested in the company and our growth opportunities generally and return capital to shareholders when it makes sense. So that — and that will most likely be through buybacks and that sort of…

James Sidoti : Okay. And then the last one, Barry, do you think you have an adequate team in place now that with these new accounting regulations? Or do you think you’ll have to add?