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InfuSystem Holdings Inc (NYSEMKT:INFU)

Q4 2013 Earnings Conference Call

March 11, 2014 09:00 AM ET

Executives

Eric Steen - CEO

Jonathan Foster - CFO

Analyst

Joe Munda - Sidoti & Company

James Harmon - Fidelity

Operator

Good morning, everyone, and welcome to the InfuSystem Holdings Fourth Quarter 2013 Conference Call. This is your operator Ellen. On this call today is Mr. Eric Steen, Chief Executive Officer; and Mr. Jonathan Foster, Chief Financial Officer. Let me first give to Mr. Jonathan P. Foster, Chief Financial Officer.

Jonathan Foster

Thank you and good morning. First of all let me get some administrative matters out of the way. The company issued a press release this morning. The release is available on most financial websites. Additionally, a web replay will be available on the company's website for 30 days. Both the press release on Form 8-K in the company’s Form 10-K for 2013 have been filed with the SEC this morning.

Except for the historical information contained herein, the matters discussed in this conference call are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements.

These risks and uncertainties include general economic conditions, as well as other risks detailed from time to time in the InfuSystem's publicly filed documents. Specifically information about risk and uncertainties that could cause the company’s actual results and financial condition to differ from those predicted by forward looking statements disclosed in the company’s annual report on Form 10-K for the year ended December 31, 2013 under the heading risk factors and elsewhere in the report. The company has no obligation to update the forward-looking information contained in this conference call.

While discussing the company's performance, the company will refer to certain non-GAAP measures, such as adjusted EBITDA, which is not considered a measure of financial performance under Generally Accepted Accounting Principles. A reconciliation of the differences between non-GAAP financial measures such as adjusted EBITDA and the most comparable GAAP measure is contained in the company’s press release previously mentioned.

Now with that I’d like to turn the call over to Mr. Eric Steen, Chief Executive Officer.

Eric Steen

Good morning everyone and thank you for joining the InfuSystem Holdings Inc. fourth quarter and year-end 2013 earnings call. For 2013, in summary, I’m pleased with the numbers and like the way the strategy is unfolding and I am happy with the efforts of the team. As for the numbers for the year ended December 31, 2013 the company’s net income was $1.7 million or $0.08 per diluted share, versus a net loss of $1.5 million in 2012.

We grew revenue for the year to $62.3 million, an increase of 6% over prior year. We grew adjusted EBITDA by 8%, we utilized our positive cash flow to reduce the debt by over $4 million and we increased our infusion pump fleet by over $2 million. We reduced our spending in G&A by $1.4 million and our selling cost as a percentage of revenue decreased from 17% to 16%. A strategic plan that takes advantage of trends in the marketplace has been written and is being implemented. We’re connecting electronically with our customers through interfaces with electronic medical records and expanding our iPad initiatives.

We’ve expanded our footprint geographically by opening a larger Los Angeles facility and adding a new Houston facility location. Both facilities offer same day delivery of equipment for both our direct pay and third-party payor business units. We have increased our number of payor contracts which is led to increased revenue collection and we have increased our sales efforts in both pain management and smart pumps.

As for the people I have enjoyed working with the InfuSystem team immensely, my thanks goes to each and every colleague. They have embraced change enthusiastically contributing many new ideas that have help transform our company. Our new management team is a collection of veterans and new hires who are collaborating and cooperating on issues that impact both sides of the business. The team now includes veterans like Jan Skonieczny our Chief Operating Officer who’s been with InfuSystem for over 20 years. And new hires like Mike McReynolds our Chief Information Officer. Mike is leading an enhanced expanded IT group that is working on automating the process for both business units through information technology. Jon Foster our Chief Financial Officer has now been with InfuSystem for two years and has brought leadership and control to financial and cash management.

2013 was a year of improvements, in the market operationally and financially. 2014 will be a year with even more IT advancements that will allow us to gain share by making our customers more efficient and reducing our internal cost by automating our processes. 2014 will also see continued expansion of our product portfolio and geographical footprint. During my first earning call with investors nine months ago, I said that InfuSystem is a leader in IV oncology and oncology is the fastest growing segment in IV therapy. The population is growing. Cancer rates are increasing. IV chemotherapeutic agents are proven treatment method and I find it privileged to dedicate my professional energies to helping people live healthy lives. As I reflect upon my first year of service as a Chief Executive Officer of InfuSystem, those sediments still resonate. I have enjoyed meeting many of our loyal shareholders over the past few months and look forward to more the same over the coming months.

I will now turn it over to Jon Foster for specific discussion on our financial results.

Jon Foster

Thank you, Eric. Now, I’ll discuss the results for the year. Revenue for the year ended December 31, 2013, was $62.3 million, a 6% increase compared to $58.8 million for the year ended December 31, 2012, primarily in rental revenue. The increase in rental revenues of $2.5 million or 5% is primarily related to the addition of larger customers, increase penetration into our existing customer counts, the increase in the colorectal cancer and other cancer patients treated with the Company's services and the continuation of the revision by a major group of third-party payors in their claims processing guidelines. In 2013, the Company added more payor plans under contract, the vast majority will continue to positively impact revenue.

Also during this year, we felt the impact of the sequestration for March 2013 four where the reduction of revenue by less than $0.1 million per quarter since that day. Sales increased by $0.9 million or 18% due to sales of inactive rental fleet and previous opportunistic pump purchases. Gross profit for the year ended December 31, 2013 was $43.7 million, an increase of 2% compared to $42.9 million in the prior year. It represented 70% of revenues in the current year compared to 73% in the prior year. The decrease in the gross margin as a percentage of revenue in 2013 was mostly related to a higher mix of sales versus rentals and lower margin on direct payor rentals.

Revision for the doubtful accounts for the year ended December 31, 2013, was $6.5 million compared to $5.3 million for the year ended December 31, 2012. It represented 10% of 2013 revenues and 9% of 2012 revenues. This increase is related to a higher percent of accounts receivable coming from patients versus third-party payors. Going into 2014, this will continue to be a focus of management. Amortization of intangible assets for the year ended December 31, 2013, was $2.6 million, which was consistent with prior year amount of $2.7 million.

For the year ended December 31, 2013, our selling and marketing expenses were $9.7 million, compared to $9.9 million for the year ended December 31, 2012. The increase in selling and marketing expenses for the 12 months period was mainly attributed to lower travel, entertainment and salaries and commissions. As compared to the prior year, these expenses decreased from 17% to 16% of revenue. Selling and marketing expenses during these periods consisted of sales, salaries, commission and associated fringe benefit payroll-related items marketing, share base compensation, travel, entertainment and other miscellaneous expenses.

It’s important to know the general and administrative expenses and G&A during these periods consisted primarily accounting administrative, third-party billing and contract services, customer services, nurse billing staff and service center personnel salaries, fringe benefit, payroll related items professional fees, legal fees, insurance and other miscellaneous items. During the year ended December 31, our G&A expenses were $19 million, a decrease of 18% from $23.1 million for the year ended December 31, 2012. Normal G&A exclusive of one-time items described in our Form 10-K and stock compensation decreased by $1.4 million from $18.6 million in 2012 to $17.2 million, reflecting the impact of cost cutting and realignment of management.

During the year ended December 31, 2013, we recorded interest expense of $3.5 million compared to $3.3 million for the year ended December 31, 2012. Although interest rates under the debt input put in place in 2012 and carrying over into 2013 are higher than those last year. The increase is partially offset by the fact there are no longer ticking fees equal to 1% per months with aggregate amount outstanding in 2012. That ticking fee related to $1 million of loan in 2012. Our last debt deal tickets from the effective rate of on those 20% including the ticking fee to below 10%. We’re focused on reducing our cost to capital in 2014. During the year ended December 31, 2013 we reported income tax expense of $1 million compared to a benefit of $0.7 million for the year ended December 31, 2012. Effective tax rate for the year ended December 31, 2013 was 38.2% compared to 30.84% for the year ended December 31, 2012. The increase in effective tax rate is primarily due to the prior reversal of certain reserves for contingent tax provisions and adjustments for income tax liability.

Moving onto the net income and EPS, for the full year ended December 31, 2013 the company’s net income was $1.7 million or $0.08 per diluted share versus a net loss of $1.5 million or a loss of $0.07 per diluted share in 2012. During 2013, we grew earnings per share from breakeven in Q1 to about $0.01 per share in Q2 to $0.03 in Q3 and $0.04 in Q4. This compares to 2012’s EPS trend of a loss of $0.04, another loss of $0.04 breakeven and the $0.01 per share respectively.

Management is quite proud of this improving trend on EPS. As of December 31, 2013, net cash and cash equivalents was $1.1 million and $5.9 million availability on revolving line of credit compared to 2.3 million of cash and cash equivalents and $4.7 million availability of revolving line of credit at December 31, 2012. The decrease in cash was primarily related to positive cash flows from operating activities offset by decreases in the company debt including lowered lease balances within lower term and revolving credit facility balances. Cash provided by operating activities for the year ended December 31, 2013 was $7.5 million compared to cash provided by operating activities of $5.5 million for the year ended December 31, 2012. The increase was primarily attributed to an increase in revenue and net income in 2013.

Cash used in investment activities for the year ended December 31, 2013 was $2.2 million compared to $2.6 million for the year ended December 31, 2012. The decrease was primarily related to a lower capital purchases during 2013. Cash used in financing activities for the year ended December 31, 2013 was $6.5 million compared to $1.4 million for the year ended December 31, 2012. Change was primarily related to pay downs of revolver and the term loan this year. As mentioned in past calls and discussion, the pay down of debt is a focus of this management team. Management believes the current volumes together with expected cash flows from ongoing operations as well as the $5.9 million available as of December 31, 2013 on revolving credit facility previously referred to are sufficient to fund our current operations.

Now going forward, we believe the strength of our operations and our balance sheet, look for opportunities, and reduce our cost of capital in 2014. Adjusted EBITDA was $16.0 million or 26% of revenues for the latest fiscal year compared to $14.1 million or 25% of revenues for 2012. We use adjusted EBITDA as a means to measure the company’s operating performance before reconciliation of adjusted EBITDA, non-GAAP measure to net income or loss in our press release we issued yesterday morning. Company defines EBITDA as earnings before interest, tax, depreciation and amortization.

Discussing working capital, comparing working capital days as of 12/31/13 to this time last year, we ended the quarter with accounts receivable days outstanding of or DSO of 56 days higher than this time last year of 52 days due to more billings coming in the latter part of the quarter this year.

Our days sales and inventory including our medical equipment held for sale or rental or DSI increased slightly from 24 days to 26. Days in AP increased from 13 days to 25 days reflecting better management of AP. Overall net working capital days decreased from 63 days to 57 days. Excluding the impact of consigned inventory the 57 net working capital days for year ended 2013 decreases to 52 days. We discussed in past calls of the consigned inventories reported an inventory and offsetting liability as an accruals, not accounts payable thereby somewhat increase in our net working capital days.

One of the efficiency measures I have mentioned in prior calls is our turnover ratio where some time referred to it as our rental revenue ratio. Taking just rental revenue over a medical equipment historical cost, the ratio in the fourth quarter of 2013 was 1.55 on annualized basis. This compares to 1.57 in the previous quarter. This decrease reflects the continued increase in our third-party payor fleet by rightsizing the direct payor rental fleet in the fourth quarter of 2013. Deployed new pumps in the field take time to wrap up to speed and producing rental revenue thereby being a slight drag on the ratio.

Speaking of our pump fleet, we will study our depressible life of our pumps currently at five years. Our pump fleet is more than half fully depreciated; I look forward to share with you more on this potential change in estimate in early 2014 once we’re complete with our internal studies. Our continued investment and our rental fleet is one of reasons that we continue our guidance of high single-digit revenue growth into 2014.

That concludes the formal part of the call, now we’ll open it to questions.

Question-and-Answer Session

Operator

Thank you, we’ll now begin the question-and-answer session. (Operator Instructions).

Eric Steen

We’re ready for the first question operator.

Operator

Thank you. We have Joe Munda with Sidoti.

Joe Munda - Sidoti & Company

Good morning guys, thanks for taking the questions. Eric, can you talk about disparity between pump sales year-over-year, seems like they are becoming more of the mix as well as if you could talk to us about the gross margin on those pump sales themselves that would be helpful.

Eric Steen

Yeah, thanks Joe. I think for me and my experience in the market that I brought to InfuSystem is the rental business is great but not every customer out there was in a position that they want your need to rent pumps, and I like to grow business look at serving larger parts of the market, and so I know when we spoke you hear me use the terms and say sales, asset management rental. And so I think disposable. So I think we’re expanding at the edges of our offering and especially in our direct pay business which was primarily about renting pumps to people in a situation that needs rent pumps. Now we’re looking to doing more leases or developing asset management programs for people and we’re taking advantage of opportunistic sales, typically in the sales we have been involved with -- we got involved with some larger sales and then when you’re in a larger sales situation you got to sharpen the pencil a bit. So sometimes in those larger sales you get a little margin decrease from just kind of the margins of our pump.

So I think I look at it as sort of expanding the base and getting into different segments and serving different types of customers by opening up the aperture a bit on what our offering is.

Joe Munda - Sidoti & Company

Is that a trend that we can assume to continue, I mean how should we look at I mean thank you for the metrics for the leasing side of the business. But as far as pump sales concern it seems like a little bit of a wild card when it comes to our end for modeling.

Eric Steen

Well it hasn’t -- I think our rental business is so big I mean that especially the oncology fleet is so big that’s definitely going to be our center of gravity. And I think you’ll see sales continued to be a slightly growing aspect of the business as well leasing be. But still the center of gravity is our rental business and that market still grows, our core oncology business still grows nicely, so I think you’ll see that trend continue as well.

Jonathan Foster

If I may add to that Joe, traditionally directly in rental business as you rent our typical customers have capital budgets at year-end on a calendar basis. They look at converting rentals to sales, so if you look at historically we do have more sales in the later path of the year than we do at the first part of the year. Furthermore, you saw a little bit of decline in the past few years until this year on sales because we didn’t have the liquidity for opportunistic purchases, you got to have opportunistic pump purchases to have opportunistic pump sales.

It is little bit of a wild card but they typically do tend to be in the second half of the year.

Joe Munda - Sidoti & Company

And then as a result gross margin tends to come down from that, correct?

Jonathan Foster

Correct.

Joe Munda - Sidoti & Company

Any idea of what the gross margin is it particular to a sale but on average what the gross margin?

Jonathan Foster

It’s particular to a sale, I would say the other thing Joe maybe why the gross margin here looked even lower is sometimes you want to kind of clean up your inventory a little bit when you have some things that we’re borrowing money at a good size to rate we’ve got some things in the inventory, it’s better to in my view to move them out in 2013 and let’s start our New Year with good fresh inventory that the customers want. And I incur to our broker desk to be looked opportunistic and if we can pick up some pumps that we think are going to have -- going to arbitrage opportunities, going to have greater value through the end part of the year what’s go ahead and do that and there is definitely a little bit of risk on that but I think if we get enough irons in the fire it’s going to be a good revenue in profit source for us.

Joe Munda - Sidoti & Company

I’m sorry. And those pumps that you’re, let say, getting or liquidating are they fully depreciated.

Jonathan Foster

It varies Joe, in the fourth quarter some of the pumps that we sold this year were, the net quarter was from our rental fleet those were substantially depreciated but if they’re from our medical equipment held for sale or rental those are not depreciated and you’ll see that back in the PP&E sections.

Joe Munda - Sidoti & Company

Okay. That’s helpful. Few more questions here, Jon you went into General and Administrative all the operating expenses, I mean is this the first clean quarter we can kind of take a look at and expect this is where G&A should be and this is where selling expenses should be, how should we look at that going forward.

Jonathan Foster

I guess a couple of things going forward, one of the reasons I go through the definition of selling in G&A, our G&A cost includes some variable costs and they start talking about some of our third-party paid billing support and the nurses on the staff as that business increases those costs will vary as well. G&A is not necessarily a one big fixed cost and that’s why I bore you with the details. Second of all, as you’ve seen in some of the discussions we’ve had in the past and the presentation we filed as 8-K during the form 10-K, there are two things to note one is our investment and information technology, we estimate next few will that’s roughly $1 million some of that will capitalize, some of that will fall to the bottom line via amortization and some will be straight cash expense. And then also paying management that will cost as well.

So, we’re reinvesting into the business but we’re still focused on growth from the bottom line as well.

Joe Munda - Sidoti & Company

Okay. In terms and I guess -- just a couple of more questions. In terms of team management, I know that’s been a focus for this company for very long time even talked about before time management, I’m wondering where are you guys as far as the timeline is concerned for team management and is it realistic in 2014 that we see that.

Eric Steen

I think there will be some broader growth in 2014 but it’s still really is on initial effort and Joe as you know, I was a consultant for the Company for year before I started as CEO and I remember being in a meeting and someone had proposed higher and big paying sales force and going out there and doing it and my recommendation for time was you don’t know some of what you don’t know and so 2013 was a year of continued learning, development of some ancillary IT related services and software that will differentiate the product more so that when we do hire a big sales force we know we’re doing and they’re going go out there and really start putting the numbers up. So, we have, we do start the year with a small full time sales force which we didn’t have in 2013 and so this is for of our first year with few dedicated resources to paying a new IT software product that’s being developed to differentiate the product in the marketplace and if I didn’t feel confident about paying I would have killed the project before but I do see a future, the trends that I know about continuous peripheral nerve block and surgeries and then extending those same benefits to the home I think is a winning ticket in the new affordable care act, healthcare environment and I look forward to reporting our future experiences with you 2014.

Joe Munda - Sidoti & Company

Okay. And just one final question, the new facilities that you opened in LA, Huston, I mean how should we look at the turnover rate that you guys quote, is that rate going to come down as a result of there is a new facility or we expecting faster turnaround, how should we look at these new facilities.

Eric Steen

By turnover do you mean utilization?

Jonathan Foster

You’re refereeing turnover ratio?

Joe Munda - Sidoti & Company

Yes, the utilization of the pump.

Jonathan Foster

That will take time, from a standpoint just because we have excess pumps we won’t immediately sell those, it will take time for us to reduce our CapEx. The main issue that we’re doing those, as Eric’s mentioned before being closer to our customers same day in turnaround been able to all of our both sides of our business out of all of our locations being a one-stop shop in those locations. So, from the standpoint of financially and the turnover ratio, yes, you’re correct eventually it should be an improvement that it wouldn’t be an improvement I would expect would be material in 2014.

Eric Steen

Just to point a final point on that, so the two benefits for the two different business units for the third-party payor business unit the before every pump that was used in California was then shipped back to Michigan processed and sent back to California, now we’re eliminating that step and so we’re reducing our shipping cost and hopefully we’ll improve utilization because the pump FedEx (Ph) Hub, they’re quickly going from our facility back to the customer and then for the direct pay business for our other provider partners that need short term rentals and when you need to rent a pump generally needed in a hurry that will have same day service in these local markets and get to a broader market segment penetration by offering same day service of our direct paid rental pumps.

Operator

(Operator Instructions) Our next question is from James Harmon with Fidelity, please go ahead.

James Harmon - Fidelity

Hi guys, thanks for the time, couple of questions here, can you perhaps talk about the options plan listen (Ph) to proxy and kind of walk me through some of the math there and how you folks are thinking about it.

Eric Steen

Okay, well let me, I’ll just talk a general concept on the options and maybe let John talk about the math there. You know one of the things in my experience to recruit the type of people that I want to recruit; I want people that have an opportunity to have an upside like I do in the growth of the company and the growth of the share plan. Also, for our frontline people and I know from running a service business for 20 years and InfuSystems is a service business, you got to empower and motivate those frontline people and for me there’s no greater motivator than making them an owner of the company and that’s why I’m a big believer in the employee stock option purchase plan as well, and I think when you look at compensation in general, what I’ve learned is you generally do better with your stock option, compensation, is more motivating and less costly than cash compensation and I think the dilution effect is less than people think it is with the amount of shares and Jon could I ask you to talk about them please.

Jon Foster

Sure. Two things, one, we recently made a change in the 2007 plan and the way that works if we issue options it’s one for one, if we do share grants it’s a two for one so if we have 500,000 shares available, we issue a 100,000 shares so the grant would come down 200,000. If we issue a 100,000 shares of options than with our float, we recently had some options exercise via the cashless method and I believe the ratio was roughly 15, it’s actually only 15% of the number of options that we’re exercised with actually issued in shares. So materially different from we’re issuing options, the dilution is very, it’s quite minimal than just the shares on the face. We had not - right now currently crafting the proxy, and we’ll be coming up with the items in that proxy coming forward end of year, as last year we asked for shares for that plan, I don’t think it’d be a fair assumption. I think it’d be a fair assumption to think that we’d be asking for those again but you’ll be seeing a draft of our proxy shortly.

Eric Steen

The other thing -- the two million, that’s not two, I’m going to make that last a while, I think people will see that I’m fair but frugal and I’m not the type to pass out a bunch of bonuses and stock options like Santa Claus, so I expect those two million to last for a while as we go through a three year plan and continue to recruit the type of people that we need, to be successful in this market place.

James Harmon - Fidelity

The cashless then, it looks like and it sounds like some my vantage that that’s a win-win for shareholders, where you’re able to grow the team and incentivize people appropriately for the hard work they’re putting in but it’s also not, it’s not as diluted but the two million option might appear to some people on the face of it. So I just wanted to understand, make sure I’m understanding that correctly.

Jonathan Foster

Yes, very much so, the way that that is calculated we use the five days previous average so no one can advantage of a one day spike in the stock price the way that the board crafted that language was to be very-very fair to shareholders and as, like I just mentioned and to your point, out of the 100,000 shares were issued at the current price based on a 225 exercise price, half you withhold for taxes, half you withhold - you need to do the cashless it’s roughly 15,000 shares that would be issued. So much, much less diluted than either one a share grant and or shares actually being purchased and putting out there in the open market.

James Harmon - Fidelity

Great, well thank you for clarifying that, my next question is, on the possibility of a debt refinancing, there’s a comment in the press release this morning hinting sort of along those lines and obviously you guys as you’re looking through the company in recent years on the best you can with the capital structure you inherited but it looks to me like, the debt salary expenses for a company of this quality with the recurring revenue base and the way you’ve managed the balance sheet. So can we expect that that interest rate may come down over time because the way I’m looking at it, if you could, if you could refinance more of today’s rates than their earnings, the earnings potentially get doubled just on saving the loan (Ph)?

Eric Steen

Well, you’re much slow in your math I mean first of all our relationship with Wells Fargo and PennantPark are first class. They came to the table and refinanced this last year during when there was lot of thoughts around our numbers and discussion with Jon just mentioned around our G&A was hard to really see what the real numbers were and Wells and Pennant were able to see through that. But likewise as I mentioned during the call, with our numbers with ratios with this paying down debt or cash flow, I definitely see that interest rates coming down in 2014.

James Harmon - Fidelity

So there is nothing in the loan agreement or the covenants that would prevent refinancing within…

Eric Steen

There are early payment penalties. It went from 5 to 4 on the first anniversary and there from 4 to 3 on the November anniversary, so there will have to be a cost benefit in that analysis performed in any type of refinance potential.

James Harmon - Fidelity

Okay, understood. Thank you. You talked about some of the growth opportunities that were emphasized in the press release. You talked about organic growth and broadening your presence in oncology?

Eric Steen

Yes in our oncology home patients, cancer rates are increasing so we’re getting our existing 1600 sites of care giving us more patients and also we’re growing new customers in the marketplace. So we’re expanding the number of customers. We’re increasing volumes with existing customers. The growth of other types of cancer at one point continues 5-FU infusion for colorectal cancer patients was the dominant InfuSystem model and now we see a variety of other types of cancer that are being treated with home infusion of different types of drug. So the cancer is not waiting for the Affordable Care Act but the good news is continuous infusion of chemotherapeutic agents has been proven with documented outcomes to defeat cancer in some patients and we’re capitalizing on that trend.

Jonathan Foster

And to speak specifically to the numbers, what we’re seeing is a number of patients that we’re treating for CRC colorectal cancer are increasing and at the same time our treatments of other cancers increases as a percentage of our business because we’re going at a faster rate in our CRC business.

James Harmon - Fidelity

Okay great.

Eric Steen

Just other comment to make about that, in Affordable Care Act and as healthcare system anticipate that and look for the most efficient affordable setting, there is no setting for IV therapy that is efficient and cost effective as the home and I think we’re seeing that with our other some of our rental customers in the home infusion, full-line home infusion companies, our business is increasing with them as well just as tends to be an increase toward more care in the home.

James Harmon - Fidelity

Okay, great. Just to reiterate, it sounds like over the next few quarters or throughout the year you might have an opportunity to implement some of these growth efforts to a greater degree now that you’re creating up the business or I guess what I’m saying is you came in you done an excellent job, creating up the business Eric, credits to others as well and now it sounds like you’re shifting more into a growth mode?

Eric Steen

Well, I think if you look at the past for it’s been a good little business for 25 years. They’ve continually grown. I think one thing that’s going to make a difference I think our IT systems that make the customers more efficient that our InfuSystem is going to be the one solution that can be completely electronic with our electronic medical record interface combined with our iPad, I think that’s going to help pick up our growth in the market place in an increasing way.

James Harmon - Fidelity

Great, okay. Well, I’m sure enough you tell you guys this but just in terms to the way, the numbers look -- a great job on the quarter and we see good days that InfuSystem’s screens and bottoms one-third based on valuation metrics of all healthcare services stocks and doesn’t look like that’s going to be sustainable, you guys deserve to be a lot higher than that, so looking forward to good things and thanks for the hard work.

Operator

We have no further questions at this time.

Eric Steen

Well, thank you everyone for joining the call. As I mentioned, Jon and I are going to be out there meeting with our existing investors and potential investors and keep those cards and letters coming. Have a great day everyone.

Operator

Thank you, ladies and gentlemen. This concludes InfuSystem Holdings fourth quarter 2013 conference call. Thank you for participating. You may now disconnect.

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