InfuSystem inks three-year deal with Smith+Nephew for NPWT system

ROCHESTER HILLS - InfuSystem Holdings, Inc. (NYSE American: INFU), a provider of health care services, has entered into a three-year distribution agreement with medical technology company Smith+Nephew to distribute an advanced wound therapy system.

Under the terms of the agreement, InfuSystem will distribute Smith+Nephew's RENASYS EDGE Negative Pressure Wound Therapy (NPWT) system, which is designed for home-based patient care for those with chronic wounds.

The RENASYS EDGE system is notable for its lightweight, compact design, which enables patients to easily carry or wear the device. It features a discreet canister and operates quietly, aiming to minimize disruption to patients' daily activities.

Richard DiIorio, CEO of InfuSystem, stated, "Smith+Nephew approached InfuSystem to assist them as a secondary distribution partner for their RENASYS EDGE system. We are excited about this new partnership, that will leverage InfuSystem’s unique Patient Services platform to deliver customized solutions." He added that the partnership is expected to benefit both companies by attracting new revenue opportunities and increasing patient access to the new technology.

InfuSystem's network includes more than 800 in-network health insurance providers, covering over 96% of the U.S. population. The company has established itself as a trusted service provider in the health care sector, with a focus on facilitating outpatient care for durable medical equipment manufacturers and health care providers.

Smith+Nephew, founded in 1856 in Hull, UK, operates in over 100 countries and generated sales of $5.2 billion in 2021. The company specializes in the development of medical technology for the repair, regeneration, and replacement of soft and hard tissue.

The announcement of this partnership is based on a press release statement and contains forward-looking statements, which involve certain risks and uncertainties. These statements are not guarantees of future performance and are subject to factors that could cause actual results to differ materially from those projected.

In other recent news, InfuSystem Holdings announced a new stock buyback initiative. The company's Board of Directors has authorized a plan to repurchase up to $20 million of its outstanding common stock, a program set to continue through June 2026. This new authorization replaces the previous buyback plan, under which InfuSystem repurchased about 550 thousand shares, totaling approximately $6.2 million.

CEO Richard DiIorio stated that this authorization reaffirms the company's commitment to its buyback policy and is a sign of the Board's confidence in the company's operational stability and financial health.

In more recent developments, InfuSystem reported a 5% increase in revenue to $32 million for the first quarter of 2024, driven by its Device Solutions business. The company also saw a 10% increase in gross profit with a gross margin of 51.5%. However, nonrecurring expenses totaled approximately $1.2 million, affecting the quarter's operating performance.

InfuSystem closed a significant rental deal with an oncology customer and anticipates material contributions from its Wound Care initiatives starting in early 2025. The company is investing in IT and business applications upgrades and remains confident in achieving high single-digit revenue growth and adjusted EBITDA in the high teens for the year.

InvestingPro Insights

As InfuSystem Holdings, Inc. (NYSE American: INFU) embarks on its new partnership with Smith+Nephew, analysts are monitoring the company's financial health and stock performance closely. According to InvestingPro data, InfuSystem has shown a promising revenue growth of 12.19% over the last twelve months as of Q1 2024, with its gross profit margin standing at a solid 50.73%. This indicates a robust ability to generate earnings relative to its revenue, which is a positive sign for the company's financial stability.

However, the stock has experienced significant volatility recently, with a one-week price total return showing a decline of -14.7%. This could reflect market reactions to broader economic conditions or specific events affecting the sector. InfuSystem's fair value, as determined by analyst targets, is currently set at $15, suggesting that there may be potential for recovery and growth in the stock's value.

InvestingPro Tips highlight that InfuSystem is expected to be profitable this year, with net income projected to grow. This aligns with the company's strategy to expand its services and offerings through strategic partnerships like the one with Smith+Nephew. Moreover, the company operates with a moderate level of debt, which may provide it with the flexibility to navigate its growth plans without being overleveraged.

For investors seeking more detailed analysis and additional insights, InvestingPro offers further tips on InfuSystem, with a total of seven InvestingPro Tips available, including perspectives on the company's valuation and cash flow yield, as well as its dividend policy.

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