InfuSystem Announces $20 Million Stock Repurchase Program

Rhea-AI Summary

InfuSystem, a national healthcare service provider, announced a $20 million stock repurchase program authorized by its Board of Directors. This program extends through June 30, 2026, and replaces the previous authorization expiring June 30, 2024, under which 550 thousand shares were repurchased for $6.2 million. The new program highlights confidence in the company’s operations, financial strength, and future outlook, allowing flexible share repurchases under favorable conditions. CEO Richard DiIorio emphasized the company’s commitment to strategic investments for sustainable growth while considering opportunistic buybacks.

Positive

• New $20 million stock repurchase program authorized through June 30, 2026.
• Previous authorization resulted in 550k shares repurchased for $6.2 million.
• CEO expresses confidence in continued solid operations and strong balance sheet.
• Flexibility in repurchasing shares when valuations are attractive.
• Commitment to strategic investments for sustainable growth.

Negative

• Program supersedes previous authorization which was set to expire in less than a year.
• Potential for significant capital allocation to stock repurchase, possibly limiting other investment opportunities.

Financial Analyst

The announcement of a $20 million stock repurchase program by InfuSystem indicates a strong confidence in the Company’s future performance and its current undervaluation. Stock buybacks reduce the number of shares outstanding, potentially increasing earnings per share (EPS) and providing a return to shareholders. It's an effective way to utilize excess cash when other strategic opportunities or investments may not be as compelling.

Key benefits: This move could signal to investors that the management believes the stock is undervalued, potentially leading to a price increase. It also shows a commitment to returning capital to shareholders, which is often viewed favorably in the market.

Potential drawbacks: However, it is important to consider that the capital used for buybacks could be allocated towards other growth opportunities or reducing debt. If the market perceives the buyback as a lack of better investment opportunities, it might not have the desired positive effect.

For retail investors, it's important to monitor how this buyback strategy aligns with the company's overall capital allocation plans. The potential reduction in market supply of shares could result in a higher share price, but the actual impact will depend on broader market conditions and the company's future performance.

ROCHESTER HILLS, Mich.--(BUSINESS WIRE)-- InfuSystem Holdings, Inc. (NYSE American: INFU) (“InfuSystem” or the “Company”), a leading national health care service provider, facilitating outpatient care for durable medical equipment manufacturers and health care providers, announced today that the Company’s Board of Directors has approved a stock repurchase program authorizing the Company to repurchase up to $20 million of the Company’s outstanding common stock through June 30, 2026. The program supersedes the previous authorization which was set to expire on June 30, 2024. Under the previous authorization, the Company repurchased approximately 550 thousand shares of stock for approximately $6.2 million. Repurchases will be made through open market purchases, private transactions, or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 under the Securities Exchange Act of 1934 (the “Exchange Act”).

Richard DiIorio, Chief Executive Officer of InfuSystem, said, “This authorization will continue the Company’s long-standing buyback policy and reauthorizes the programs that we have used when appropriate to enhance shareholder value. I believe the stock repurchase program highlight’s confidence in the Company’s continued solid operations, the strength of our balance sheet and our outlook and guidance for the rest of 2024 and beyond. Our top priority for use of capital remains making strategic investments that position the Company for sustainable growth, although this program provides us with the flexibility to be opportunistic in repurchasing shares when valuations become attractive.”

About InfuSystem Holdings, Inc.

InfuSystem Holdings, Inc. (NYSE American: INFU), is a leading national health care service provider, facilitating outpatient care for durable medical equipment manufacturers and health care providers. INFU services are provided under a two-platform model. The first platform is Patient Services, providing the last-mile solution for clinic-to-home healthcare where the continuing treatment involves complex durable medical equipment and services. The Patient Services segment is comprised of Oncology, Pain Management and Wound Therapy businesses. The second platform, Device Solutions, supports the Patient Services platform and leverages strong service orientation to win incremental business from its direct payer clients. The Device Solutions segment is comprised of direct payer rentals, pump and consumable sales, and biomedical services and repair. Headquartered in Rochester Hills, Michigan, the Company delivers local, field-based customer support and also operates Centers of Excellence in Michigan, Kansas, California, Massachusetts, Texas and Ontario, Canada.

Forward-Looking Statements

Certain statements contained in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, such as statements relating to future actions, our share repurchase program and capital allocation strategy, business plans, strategic partnerships, growth initiatives, objectives and prospects, future operating or financial performance, guidance and expected new business relationships and the terms thereof (including estimated potential revenue under new or existing contracts). The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “goal,” “expect,” “strategy,” “future,” “likely,” variations of such words, and other similar expressions, as they relate to the Company, are intended to identify forward-looking statements. Forward-looking statements are subject to factors, risks and uncertainties that could cause actual results to differ materially, including, but not limited to, our ability to successfully execute on our growth initiatives and strategic partnerships, our ability to enter into definitive agreements for the new business relationships on expected terms or at all, our ability to generate estimated potential revenue amounts under new or existing contracts, the uncertain impact of the COVID-19 pandemic, our dependence on estimates of collectible revenue, potential litigation, changes in third-party reimbursement processes, changes in law, global financial conditions and recessionary risks, rising inflation and interest rates, supply chain disruptions, systemic pressures in the banking sector, including disruptions to credit markets, the Company's ability to remediate its previously disclosed material weaknesses in internal control over financial reporting, contributions from acquired businesses or new business lines, products or services and other risk factors disclosed in the Company’s most recent annual report on Form 10-K and, to the extent applicable, quarterly reports on Form 10-Q. Our strategic partnerships are subject to similar factors, risks and uncertainties. All forward-looking statements made in this press release speak only as of the date hereof. We do not undertake any obligation to update any forward-looking statements to reflect future events or circumstances, except as required by law.

Additional information about InfuSystem Holdings, Inc. is available at www.infusystem.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520983400/en/

Joe Dorame, Joe Diaz & Robert Blum

Lytham Partners, LLC

602-889-9700

Source: InfuSystem Holdings, Inc.

FAQ

What is the value of InfuSystem's new stock repurchase program?

InfuSystem's new stock repurchase program is valued at $20 million.

When does the new stock repurchase program for INFU expire?

The new stock repurchase program for INFU expires on June 30, 2026.

How many shares did InfuSystem repurchase under the previous authorization?

InfuSystem repurchased approximately 550 thousand shares under the previous authorization.

What was the value of shares repurchased under InfuSystem's previous program?

The value of shares repurchased under InfuSystem's previous program was approximately $6.2 million.

Why is InfuSystem initiating a new stock repurchase program?

InfuSystem is initiating a new stock repurchase program to enhance shareholder value and show confidence in its continued operations and financial strength.