Corporate Profile January 2011 OTCBB:LBMH

Transcription

1 Corporate Profile January 2011

2 Business Description Liberator Medical Holdings, Inc. s ( Liberator Medical or the Company ) wholly owned subsidiary, Liberator Medical Supply, Inc. is a national direct-to-consumer provider of high quality and innovative medical supplies to Medicare-eligible seniors. Liberator Medical is recognized for offering a simple, reliable way to purchase medical supplies needed on a regular, ongoing, repeat order basis, with the convenience of direct billing to Medicare and private insurance. Approximately 97% of its revenue comes from supplying products, service and support to meet the rapidly growing requirements of diabetes, urological, ostomy and mastectomy patients. Liberator Medical trades under the symbol LBMH and was incorporated in The Company is based in Stuart, Florida. Proven Business Model and Experienced Management Team Liberator Medical s management team includes Mark Libratore (its CEO), Robert Davis (its CFO) and John Leger (its COO). Mr. Libratore is the founder of Liberty Medical Supply, Inc., Mr. Davis was its CFO from 1995 to 1999 and Mr. Leger was its Sr. Vice- President of Operations.This is important to note because Liberty Medical Supply was the largest diabetic supply company in the United States generating approximately $600 million in revenue when it was sold to MedCo. for $1.3 billion in Target Market Urological Products: Disposable catheters Highest gross margins Highest percentage of projected revenue Mastectomy Products: Prosthetic and special bras, sleep and swimwear 70% gross margins and re-occurring up to twice a year COGS reduced to under 50% Customer database includes over 30,000 patients Diabetes Products: Blood-sugar testing supplies Established distributorship with manufacturer of new and compelling diabetes testing glucometer Entered market 2001 following expiration of Mr. Libratore s 5-year non-compete agreement Ostomy: Disposable collection devices (bags) Negotiated significant price reductions competitive advantage in market with high product costs

3 How Big is the Opportunity? According to the Centers for Medicare and Medicaid Services (CMS), national healthcare spending will nearly double to $2.8 trillion by 2011, up from $1.42 trillion in As the baby boomer population ages, the already flourishing medical supply industry will experience a 20-year explosion in growth. Between 1990 and 1999, while the U.S. population grew 9% and inflation 26%, total annual healthcare spending increased 74%. Currently, more than 90 million Americans live with chronic diseases, including Alzheimer s disease, arthritis, cancer, cardiovascular disease, chronic obstructive lung disease, and diabetes. The Company targets Medicare-eligible seniors with chronic illness. According to the U.S. Department of Health and Human Services, Medicare and Medicaid have combined annual payments of $775 billion. First Research estimates the number of Americans over 65 will double from 34 million to 62 million between 2000 and The research firm Rand estimates the number of Americans with two or more chronic conditions will increase from 60 to 81 million between the years 2000 and Current out-of-pocket spending for Americans age 65 and over with two chronic conditions is approximately $750 per year. The number of Medicare beneficiaries is expected to nearly double to 77 million by 2030 from 40 million in 2000, according to the Centers for Medicare and Medicaid Services. According to the 2009 BCC Research report, the urological market size is approximately $4.4 billion and expected to increase to $13.2 billion in Below is an analysis of the Company s addressable market for targeted disease segments as well as a description of each opportunity. Target Market Diagnosed Undiagnosed Current Market Size Diabetes 18 million 6 million $116 billion** Urological N/A N/A $4.4 billion* Mastectomy 3.2 million N/A $1.1 billion*** Ostomy 600,000 N/A $1.2 billion*** >6 million $122.7 billion Total Source *BCC Research million ** Center for Disease Control 2007 ***Center for Disease Control 2005 A Consistent Track Record of High Double-Digit and Triple-Digit Revenue Growth Liberator Medical Holdings () $14,000 $12,000 Revenue Gross Profit Income (Loss) from Operations U.S. Dollars (in thousands) Liberator Medical s sales growth has been stellar, reporting high double-digit revenue growth over the last five fiscal quarters, and triple-digit revenue growth for seven of the eight quarters during fiscal years 2008 and The Company recently reported revenues for the three month period ending December 31st, 2010 (its fiscal first quarter), of $12.2 million, an increase of 33% year-over-year compared to $9.16 million for the three months ended December 31st, This most recent quarterly performance represents an annualized revenue run-rate of $48.8 million. For the full fiscal year 2010, Liberator reported revenues of $ million, an increase of 58% year-overyear compared with $ reported during fiscal year $10,000 Net Income Cash Flow from Operations $8,000 $6,000 $4,000 $2,000 $0 -$2,000 -$4,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q

4 Strong Payor Sources Including Medicare, Medicaid, and Insurance Companies This almost always equates to 30 day collections from what is basically a AAA credit source for 80% of the bill with the individual customer responsible for the remaining 20%. In addition to the Medicare payment system, the Company is set up for direct pay with over 20 State Medicaid programs and thousands of insurance companies. The Company directly transmits electronically to all Medicare Regional Carriers, and many other insurance companies. Very High and Sustainable Gross Margins from 45% to over 70% Virtually all of Liberator s products enjoy high margins which may increase as the Company reaches growth targets and benefits from additional volume discounts. Furthermore, its customers have regularly re-occurring and predictable supply needs so inventory management is very efficient. In the past, the Company has experienced inventory turns of 2-3 times per month. Investment in Infrastructure to Support Higher Sales In January 2010, the Company completed the build out of an additional 24,000 square foot facility to house its expanding workforce and provide the infrastructure necessary to support future growth of its business. During the first six months of fiscal year 2010, Liberator added eighty-one employees in order to support the continuous growth of its recurring business, achieve regulatory compliance, and maintain customer service quality. Strong Balance Sheet The Company had cash of $7,430,000 at December 31, In addition to a strong cash position, the Company cleaned up its balance sheet over the last 12 months. During calendar year 2010, the Company converted $6,452,000 of notes issued during 2008 into shares of its common stock. As a result of the conversion, the Company eliminated all additional exposure to changes in fair value of the derivative liabilities associated with the convertible debt. These convertible notes previously had a strong non-cash impact on earnings due to stock price volatility Management has lots of skin in the game As of September 30th, 2010, out of the million shares outstanding, Mark Libratore (the CEO) held approximately 32.6% of the Company s outstanding common stock.

5 Management Bios Mark Libratore, 59, Chief Executive Officer and Founder Mr. Libratore founded Liberty (not Liberator) Medical Supply, Inc., which has become the nation s largest direct-to-consumer diabetic supplier with sales in 2002 over $250 million. He served as Liberty s president from start-up to over 900 employees at the time of his departure in In one year, sales grew from 11 million annually to over 48 million; the following year he grew sales to over 80 million (65% growth) with a run rate of approximately $100 million. He sold this business to PolyMedica Corporation, (PLMD), in August 1996 ( and stayed on as President of Liberty Medical and Vice President of PolyMedica. Mr. Libratore s entrepreneurial appetite led him to leave PolyMedica and start Liberator Medical Supply, Inc. Prior to founding Liberator Medical Supply, Inc.; the April 1998 issue of Response Magazine voted Mr. Libratore one of the top 25 most innovative direct TV advertisers of the year. Bob Davis, 64, Chief Financial Officer Bob Davis has a Masters degree in Accounting, University of Houston, and holds a CPA certificate from the State of Texas. Bob has held numerous financial executive-level positions as Comptroller and Vice President of Finance for companies such as controller for a Manufacturer of Jet Engine parts, TurboCombustor Corp., Data Development Inc., and Caribbean Computer Corp., and most notably,served as CFO and Manager of Financial Planning for Liberty Medical Supply, Inc. from 1995 to 1999 a $500 million direct-to-consumer diabetic supply company founded also by Mark Libratore the current president of Liberator Medical Supply, Inc. John Leger, 55, Chief Operating Officer John was the Senior VP of Operations at Liberty Medical Supply from December 1991 through January He was responsible for diabetic call center operations, customer services, repeat customer sales, document acquisition and management, claims processing to Medicare, mail services, shipping, receiving, and purchasing. John worked closely with Mark Libratore in building the mail order diabetes business to $100M in annualized sales, and stayed on with the company through its growth to over 650,000 active customers. John entered the Home Medical Supply Industry in 1974 and was part of the Senior Management Team at Foster Medical in Michigan and Florida. Foster eventually sold to Avon Products during the 1980 s. Responsibilities at Foster included team development, acquisition integration, sales, and operations management of 25 branches and over $25M in annualized sales. Paul Levett, 65, VP Marketing Paul Levett was the former Owner, Founder of Lieber, Levett, Koenig, Farese and Babcock, a successful New York advertising agency, and previous to that, President of Lowe Direct, a prominent direct marketing and advertising agency. Paul has over 25 years of direct to consumer marketing and advertising experience working with a wide range of fortune 500 companies, including, Dell Computer, Xerox, Bristol Myers/Squibb, Coca Cola, Mercedes Benz, Procter and Gamble, Exxon, IBM, Nabisco, Colgate Palmolive and Citibank. His work as a copywriter, creative director and marketing strategist has won numerous creative and marketing awards including The One Show, The Clio Awards, The Andy Awards, The Echo Awards and The Caples Awards for Direct Marketing.

6 Financial Information Quick Facts and Key Ratios 12-Month Trading Price Low $ Month Trading Price High $2.40 Closing Price $1.27 Shares Outstanding ,419,00 Market Capitalization $60,222,000 Enterprise Value $52,792,00 Last Quarter Revenue $12,204,000 TTM Revenue $43,965,000 Current Assets (Most Recent 10Q or 10K) $18,207,000 Current Liabilities (Most Recent 10Q or 10K) $6,611,000 Current Ratio (Most Recent 10Q or 10K) 2.75 x Total Assets (Most Recent 10Q or 10K) $32,221,000 Total Liabilities (Most Recent 10Q or 10K) $8,683,000 Shareholder Equity (Most Recent 10Q or 10K) $23,538,000

7 Income Statement

8 Balance Sheet

9 Cash Flow Statement

10 Why consider investing in LBMH? Very large market opportunity. Proven Business Model Being Executed by Experienced Management Team with Successful Track Record Consistent Track Record of High Double-Digit and Triple-Digit Revenue Growth. Strong Payor Sources Including Medicare, Medicaid, and Insurance Companies. Very High and Sustainable Gross Margins from 45% to over 70%. Recently Made Investment in Infrastructure to Support Higher Sales. Strong Balance Sheet. Small Float; Management has lots of skin in the game. For Additional Information visit or Contact: Gerald Kieft The WSR Group Important Note: This profile may contain forward-looking statements, particularly as related to pro forma financial statements, earnings estimates and business expectations, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact and may be forward looking statements. Forward looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. These forward-looking statements are only made as of the date of their release and Liberator Medical Holdings, Inc. does not undertake any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.