InfuSystem Holdings, Inc. (INFU) Q4 2012 Earnings Report, Transcript and Summary

Good morning, and welcome to the Q4 Earnings Conference Call. My name is John, and I'll be your operator for today's call. At this time [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to CFO, Jonathan Foster. Jonathan, you may begin.

Good morning, everyone, and welcome to InfuSystem Holdings Fourth Quarter and Full Year 2012 Conference Call. This is Jonathan Foster, Chief Financial Officer. With me on the call today is Mr. Dilip Singh, our Interim Chief Executive Officer and Jan Skonieczny, our Chief Operating Officer. First of all, let me get some administrative matters out of the way. The company issued a press release earlier 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. 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 InfuSystem's publicly filed documents. The company has no obligation to update the forward-looking information contained in this conference call. While discussing our performance, we refer to certain non-GAAP measures such as EBITDA or adjusted EBITDA, which is not considered a measure of financial performance under Generally Accepted Accounting Principles. Now with that, I'd like to turn the call over to Mr. Dilip Singh.

Thank you, Jon. Good morning, everyone. It's been an honor and a privilege to serve as Interim Chief Executive Officer for the past year. As I deliver what is essentially my valedictory address prior to handing the CEO responsibilities to a very capable annex [ph] team from whom you'll be hearing much in the weeks and months ahead. I'm pleased to report that 2012 represents what will certainly be viewed as a watershed period in the company's history. I arrived on the job on April 24, 2012. I had no previous business relationships with anyone on the management team and there had been a change in control of the company at the level of the Board of Directors. I inherited a business plan and operation in place for 2012. As in the past, with other turnaround situations that I have led, I immediately assessed the quality of the senior team and the business as a whole, including our critical customer relationships. The management team has run a sprint for the entire year, and I'm so grateful to them. I thank every employee for their hard work and dedication. It is reflected in the results that Jon will describe in greater detail. The Board of Directors and I made a series of strategic decisions during 2012 and everyone can see the results. One of the key accomplishments was putting a new Credit Agreement in place with bankers who are interested in helping InfuSystem grow. My Chief Financial Officer in his direct report, deserve thanks from all the shareholders for their intense efforts and documented results. The strength of our core business and quality of management team gave us the ability to put a flexible and strong financial package in place, all of which disclosed to you last December. It is with joy and pride that the board created a new position for the company, Chief Operating Officer and promoted Jan Skonieczny to that role. It took me longer to learn how to pronounce Jan's last name correctly than it did me to recognize how key Jan is to the ongoing successes of InfuSystem. On a macro level, we developed for the first time, bottoms-up operation plan for 2013 and beyond for the company. We have a team in place that intends to provide extraordinary service in which we excel and products to our customers. Our business makes life better for patients who receive their medications through our products. Now let me describe some specific accomplishments. Most importantly, the full year 2012 and fourth quarter results affirm the efficacy of our current strategy to focus concurrently on 3 tracks: operations, finance and sales and service. Since the new management team took place -- took control in April of 2002 (sic) [2012], we successfully implemented numerous operation and nonemployee-related efficiencies, which combined to generate annualized nonemployee-related cost savings of $1.6 million. We also increased the number of third-party payor relationships. We expanded our provider footprint. We enhanced our IT capabilities. We delivered the best-in-class service and patient satisfaction, while further integrating and realizing business synergies. We secured a $36.5 million credit facility that helped restore liquidity that Jon will discuss later. We delivered a far stronger balance sheet also in 2002 (sic) [2012]. Not only we did stabilize the company. But now, we have shifted the focus where to sustaining long-term growth is now the #1 priority for InfuSystem. The company was once again profitable in the fourth quarter. This is far cry from the last April when the company reported virtually no cash and only had $2.1 million in available funding. We now have produced 2 profitable quarters in a row, enjoy a new healthy banking relationship and improved the state of the company's liquidity to where it provides us capital to grow the business. Revenues in the fourth quarter were $16.2 million, up 16% from the fourth quarter of 2011. Total revenues for the year ended December 31, 2012, were $58.8 million, an 8% improvement from 2011. Operationally, the company continues on a very strong track, especially in rentals. We continue to be adding payors, providers and partners, and we continue to be the supplier of choice in our markets. Our management team and employees together have embraced efforts to focus, prioritize, execute and sustain this growth. As mentioned in our release, excluding fees associated with a concerned stockholder group, settlement agreement, early extinguishment of debt related to the Fifth Amendment and a new credit facility and the strategic alternatives, adjusted EBITDA for 2012 was $13.1 million, up from $10.3 million for 2011. In conclusion, we are encouraged by our continued progress and the opportunities available to us in our core market. Our goals remain the same. Grow top line revenues and deliver profits, continuing seeking operational efficiencies, identifying revenue diversification opportunities, improved EBITDA and paying down debt. With that, I wish to personally thank you for your support as our valuable shareholders over the past year. The company will be in very talented hands of our incoming CEO, Eric Steen; CFO, Jonathan Foster, Chief Operating Officer, Jan Skonieczny; and most important, the InfuSystem employees, who have worked very hard and so tirelessly this past year. And now it's my pleasure to turn the call over to Jon Foster, who will discuss the financial results in more detail. Then we'll open the call to your questions. Jon?

Thank you, Dilip. Now I'll discuss the financial results for the year. Total revenues for the year ended December 31, 2012 was $58.8 million. This was an 8% increase compared to $54.6 million for the year ended December 31, 2011. Primarily, in rental revenues. The increase in revenues is primarily related to the addition of larger customers, increased penetration into our existing customer accounts, and the resolution of the oncology drug shortage affecting certain products which was having a negative effect on our new patient startups on our pumps, as well as a major third-party payer group revising their claim processing guidelines in the fourth quarter. Gross profit for the year ended December 31, 2012 was $42.9 million, an increase of 21% compared to $35.4 million in the prior year. It represented 73% of revenues in the current year compared to 65% in the prior year. This increase in the gross margin as a percentage of revenue in 2012 was primarily related to the increase in rental revenue, specifically third-party billings, which generate a higher gross margin than sales revenue. For the year ended December 31, 2012, our selling and marketing expenses were $9.9 million compared to $9.4 million for the year ended December 31, 2011. As compared to the prior year, these expenses remained consistent at 17% of revenues. Getting our selling cost back in line as a percentage of revenues was a goal for the entire 2012, one that was accomplished in the fourth quarter. During the year ended December 31, 2012, our general and administrative expenses were $23.1 million compared to $18 million for the year ended December 31, 2011. General and administrative expenses have increased from 33% to 39% of revenues for the year ended December 31, 2012, compared to the same period in the prior year. The increase was primarily related to an increase in professional service cost related to the concerned stockholder group, additional legal and accounting and outside service fees of $2.2 million were incurred during the year related to this matter, and the Fifth Amendment to the credit facility. Severance payments for the former CEO amounted to $1 million, and $0.6 million was recorded for retention payments to key employees during this ongoing matter, and we incurred $0.6 million associated with our decision to evaluate potential strategic alternatives. These increase were mainly attributable to the aforementioned increase in finance and accounting staff and several other general and administrative accounts. These costs were primarily offset by the reversal of previously recognized stock compensation expense of $1.4 million. During the year ended December 31, 2012, we recorded interest expense of $3.3 million compared to $2.2 million for the year ended December 31, 2011. These increased amounts were mainly attributed to the payment of the monthly ticking fee equal to 1% per month of the aggregate amount outstanding on our Credit Agreement under our Fifth Amendment, which amounted to approximately $1 million for the year ended December 31, 2012. As of December 31, 2012, we had cash, cash equivalents of $2.3 million and $4.7 million availability on the revolving line of credit compared to the $0.8 million and $4.9 million availability on the revolving line of credit as of December 31, 2011. Cash provided by operating activities for the year ended December 31, 2012 was $5.5 million, compared to cash provided by operating activities of $6.7 million for the year ended December 31, 2011. The decrease was primarily attributable to an increase in revenue. As mentioned in our third quarter call, we intended to refinance our indebtedness prior to maturity in order for us to maintain sufficient funds for our operations and alleviate the burden of the additional cost generated by the Settlement Agreement and the Fifth Amendment. As previously released on November 30, 2012, we entered into a credit facility with Wells Fargo and PennantPark as lenders. This is a 4-year deal, interest on the term loan is payable at the company's choice of LIBOR plus 7.25%, and we also have a LIBOR floor of 2% in there. For the Wells Fargo prime rate, plus 6.25%, and that also has a floor of 3%. As of December 31, 2012, interest was payable at LIBOR plus 7.25%, which equaled 9.25%. This is much more favorable than the old rate plus the 1% ticking fee per month that we had under the old credit facility. Adjusted EBITDA for the fourth quarter of fiscal 2012 was $3.8 million compared with $1.5 million in the year-ago period. For the year 2012, adjusted EBITDA was $13.1 million compared with $10.3 million, excluding asset impairment charges for 2011, all adjusted on a similar basis. We use adjusted EBITDA as a means to measure the company's operating performance. We have a full reconciliation of adjusted EBITDA, a non-GAAP measure, to net income or loss in our press release issued yesterday evening. The company defines EBITDA as earnings before interest, taxes, depreciation and amortization. We ended the quarter with accounts receivable days outstanding or DSO of 47 days in line with this time last year. Our day sales in inventory or DSI declined from 8 days to 7 days due to higher sales. Our day sales on medical equipment held for rental or sale increased from 13 to 15 days due to increased equipment levels. Day sales and accounts payable declined from 26 to 12 days, mainly due to the payment of expenses related to the Settlement Agreement. In summary, as Dilip stated earlier, this year is one that we are proud of. Getting back to profitability, while strengthening the balance sheet. This concludes the formal part of the call. With that, we'll open it up to questions. Operator?

[Operator Instructions] We do have a question from Joe Munda from Sidoti & Company. Joseph P. Munda - Sidoti & Company, LLC: Real quick, you guys talked in the press release about new customers added in the quarter. I was wondering if you could give us a little bit more color there, as well as the number of pumps and the current utilization rate that you guys have right now with the pumps?

Joe, thanks for the question. We have gained quite a lot of providers in our rental business. Jon can tell you exactly the total number of pumps we have. Utilization as you know, previously discussed, we don't disclose because of competitive reasons. So we can definitely tell you how many pumps we have. Jon?

We have 24,000 pumps in one of our rental fleets, and then we have roughly 26,000 pumps in another. We are buying more pumps. It is seasonal. Typically, most of our customer adds are in the first quarter, and it does take a while for those to ramp up.

Our next question is from Boris Peaker from Oppenheimer. Boris Peaker - Oppenheimer & Co. Inc., Research Division: I guess my first question is for Jon. You mentioned on the call that in terms of selling cost, your goal was accomplished. And my understanding, that was selling cost as a fraction of revenue. Do you anticipate kind of a similar fraction of revenue going forward, and I guess the same kind of a cost in terms of G&A. I'm not asking for a specific guidance, but just kind of want to get a sense, the current fraction of revenue, is that a reasonable long-term trend line? Is there more opportunity for cost savings? Or do you think it's going to go up?

Well, I think a sales force has just done a tremendous job this year, and what they were able to produce and also at the same time keeping their expenses in line. With increased sales, I think you will see increased dollars, but as all businesses, we tend to hope that we'll be able to increase sales at a higher rate than we increase our selling expenses. With G&A, 2012, to be quite honest, was a mess, with everything, with the concerned shareholder cost, the strategic alternatives, I think you'll see G&A costs settling down, and you will see some improvements as we move forward in the year. Boris Peaker - Oppenheimer & Co. Inc., Research Division: Got it. That's helpful. Now my follow-up question is, you mentioned there was a change in reimbursement for some patients, including requiring some out-of-pocket expenses. And I see that there was a slightly greater allocation for doubtful accounts. Could you just comment on that. Exactly, what was the change? How does that affect some patients and how did the doubtful accounts calculations change?

I'll let Jan Skonieczny take the first part of that, and I'll follow-up on the other aside.

Thank you Jon, good morning. I'll comment on this. The one thing is -- that's constant is that payment terms with third-party payers change always. I've been here for a very long time, and that's one thing that I've always been a part of and one of the -- actually one of the company's strengths. We always have ups and downs in revenue and in bad debt expense due to the changing term, and the important takeaway from this is that, now that we have a national pricing contract with these major group of payers, it enables us to establish direct payor relationships with members of the group.

Yes. And so to kind of follow-up on that, and thank you Jan. The -- we have some pretty strict accounting revenue recognition policies within this company, and we adhere to them. So there's very little room in there for -- to nudge any estimates, it's fairly strict. But as Jan mentioned, the contracts change, add a network, in network. Sometimes you'll see revenue go up and bad debt go up if there's a higher payment from a patient. And if eventually we're able to negotiate that contract, where more of the reimbursement is coming from the third party payer, you'll see bad debt go down and potentially you might see conversely revenue go down as well. But all in all, net-net, it ends up being the same.

And we have Joe Munda from Sidoti & Company. Joseph P. Munda - Sidoti & Company, LLC: I had another follow-up. It's similar to the question that was just asked. In the case of Medicare with 31% of gross billings, and I mean, with what's going on with the Affordable Care Act, can you give us some indication of what the potential impact could be going forward in your best guess?

Okay. I'll take a stab at your question, but could you restate it for me please, just so I'm clear on what the ask is?

Joe? I guess operator. I think the operator took them off the queue. Why don't you just talk in general about the Affordable Care Act, Jan?

Sure. So one question that seems to be on everybody's mind is how will this new sequester cut, affect the company. And the company will be experiencing beginning April 1, a 2% decrease in Medicare payments. That is not anything different than any other medical provider out there, but it's important to understand that, that's a 2% decrease in payments from Medicare, not a 2% decrease in the fee schedule. With respect to competitive bidding, we did submit our bids by the end of 2012, and we submitted our bids to request contract in each of the 9 MSAs that will be affected by the round 1 recompete. The important takeaway here is that we have a task force that is extremely focused and keeping on top of updates as information is released to us by CMS. And another thing to remember is, although Medicare is 30% of our revenue, the other 70% of our third-party payer revenue is derived from other payers and which we're continuing to add to our list of contracted payers. So that's the offset. We keep our focus in all areas.

And with regard to numbers, if you go to the 2% and the CMS and the percentage that's in our K, you're talking roughly $200,000 potentially from April to December, that the 2% cut would have an impact on. From a standpoint, the CMS, that is an unknown. It's one of the risks that we've stated in our 10-K. I think we have some good action plans internally within the company that we would be able to respond somewhat against those cuts. And I think Jan and her operations team has a very good handle on the situation. They've encountered a lot of change throughout the decades that they've been here.

Our next question is from Dan Baldini from Oberon Asset Management.

I have sort of an accounting question. When I look at your profit and loss, in cost of revenue, you have pump depreciation and loss on disposal. And for example, for the full year 2012, it's $6.752 million. But then if I look in the cash flow statement, you have depreciation of $5.668 million, and then you have a gain on sale of medical equipment. So I'm just curious, what are the -- under this pump depreciation and loss of disposal, what are the elements there, obviously there's the depreciation, but is there a loss or a gain on the sale of the medical equipment?

You have a gain, I guess that's just some semantics there on the P&L side. With regard -- that's a great question because with the recent kind of guidance from the SEC and also the way that we work with pumps, our predominant source of revenue is from our rental income. When we buy a pump, it may go into our rental pool, then go back and be sold or vice versa. It may be where we potentially originally bought it for sale and now it's going into the rental pool. So from that matter, that's why the changes were made on the balance sheet and while we just group medical equipment in 2 groups, one that's not in service and one that's in service. From a standpoint of the cash flow statement, we did have a gain on that in 2012.

And is it sort of a -- is it -- do you expect that you'll have gains on the disposal of this equipment on a regular basis?

I'm sorry, could you repeat that?

Do you expect you'll have gains on the disposal of equipment on a regular basis?

I guess 2 things there. I mean, again, let me clarify that. We had gains on pumps that we sell. Because our pumps are depreciated with our service capabilities in Kansas, we keep our pumps in top-notch condition. You can't tell the difference between a 15-year old pump and a 5-year old pump. I mean literally, if you put them in front of you, you can't really tell the difference. We do have though in our rental fleet, just like in any rental fleet, you do have sometimes pumps that are lost. So that's where the loss on disposal comes from. That's where that language comes from. So of course those are not going to have a gain. But on ones that we sell, we definitely have a gain.

Okay. So but my question was, you regularly sort of update your equipment fleet, and in the course of doing this, you dispose of pumps and you record gains. It would have...

That's correct.

Yes, okay. And so the reason you have gains is that your depreciation schedule sort of depreciates them faster than the economic depreciation?

By all means, yes.

Yes. So if you're making some sort of a calculation where you, like EBITDA, where you add back depreciation, shouldn't you then also add back or subtract the gain on the sale of the pumps because really, if I think about the sort of economic or the true economic aspect of these pumps, the depreciation charge in a way is overstated, but it's corrected by the gains that you have on the sale of the pumps?

Correct. When we sell a pump, we actually reverse the prior depreciation and work that out. So it does come out of EBITDA. But again, just because our predominant source is rentals, a major source of our income is sales. I mean, we do sell pumps. So again, adjusted EBITDA is a non-GAAP measure, so I guess there can be 2 sets of judgments on that. But from our standpoint, selling pumps that have been in our rental fleet is part of our business. Very similar if you look at other rental companies. Apria is one. The ones that are also in rentals and sales, you can look at Rent-A-Center, Aaron's, actually Men's Warehouse, they have tuxedos that have similar type of accounting issues there. And so, from our standpoint of our accounting, we feel that we're in line with the industry.

Our next question is from Shaun Noll from Stirling Capital.

What was the -- just to clarify, what was the debt level, what was the debt levels when you guys came in on the company?

Oh, I'd have to go back and add that up. I mean, during the year, let me just talk in general, if you look at the third quarter press release we had, we have reduced debt by $6 million from the first part of the year to the end of the year. Part -- when we did the debt transaction, this was from Q1 to the end of Q3, when we did the debt transaction, there were 2 things that happened. The debt was an expensive process, bringing that on, we had some capitalized costs that also were refinanced. I think it was just shy of $2 million. We had fees to Houlihan Lokey. We had attorney's fees. We had bank placement fees. It was expensive money. Still cheaper than what we had saddled with the Fifth Amendment in BofA. We also had some settlement costs that were very buried in accounts payable during Q1, Q2, Q3 of roughly $2 million. And in that, we had to pay -- we paid that off with the debt financing. So that added to the debt as well. So during the year, we reduced our debt. But from a standpoint -- if you look at it year-over-year, we're at $31 million, less $9 million, and if you look at the additional debt cost, the issuance cost and also what we covered with the concerned shareholder group, we reduced the overall debt burden of the company.

Okay. Thank you. Then I guess the only follow-up question I have would be, it's more of a statement, I'm surprised there was no disclosure from you guys when the Medicare cuts were announced, any thoughts on how you're going to keep shareholders updated on that key topic in the future?

Well, it is. It is one of our -- it's our first risk in our risk section in our 10-K. Second of all, our product codes have not been involved in any of the announced bids from a standpoint of their initial round 1 and round 2. The price cuts vary depending on the codes, so we don't want to set any false expectations because we don't know. The price cuts range from scary to not that bad. We have, as Jan just mentioned, we have submitted our bid. Our codes came up in round 1 recompete. That's disclosed in the 10-K, and that will be announced when, Jan, sometime this summer?

Yes. Late -- probably mid-to-late summer. There'll be an announcement as to what the cuts are, and it's also important to note that any cuts that are released won't take place until January 2014. So -- but again, as Jon mentioned, we don't really know what those cuts are going to be with respect to competitive bidding. Things are unfolding daily. We get additional information, but nothing up to this point has been definite with respect to the round 1 recompete.

Information is very limited coming from the government. So from that standpoint, believe me, soon as we hear anything in our contracts, we will definitely file an 8-K.

Our next question is from Kevin [indiscernible], a retail investor.

So from the perspective of your sales force, can you just give us a little color on what the typical sales process looks like from, I guess, initial contact with a prospect until you sign them. And in addition to that, about how sticky is the business you guys bring in?

Yes, this Dilip. So we have rentals and we have sales. On the rental side, the process starts with approaching the providers. This could be community oncology clinics. This could be large clinics treating multidisciplinary cancers. And once we go to the providers, we show them that we can -- the pump as a service means, we tell them we have been in this business, we know how to source the technology of these pumps, and we are totally aware of the changing trends in the technology and how it can impact the providers because they're the ones who are providing these services to the patients. Then pump as a service is -- because we have a very good service engineering group which can service large pumps, ambulatory pumps, and so we take the responsibility of servicing these pumps when they -- especially when they come out of warranty from the manufacturers. We have built a large amount of -- which is a tremendous amount of high-quality intellectual property of the company, third-party payer relationships. And Jan talked a little bit about it, the 70% of our revenue coming from commercial third-party payers and 30% coming from CMS. So we then take the billing aspect off the hands of our providers. We do all the billing for the patients. And last not but the least, where we excel the most is, we have the customer care and a nursing support line once the patient start utilizing our pumps, infusion pumps to ensure that we can serve our patients in a very effective manner, 7 by 24 and this is supported by the nurses. So just talking about rental would not be fair to the company because we provide pump as a service. Once we go to these providers, and the providers are convinced that we can provide that pump as a service, then obviously there is a time lag in signing agreements in terms of for indemnification and so and so forth. And once those agreements are in place, then obviously we start supplying those pumps. And utilization of the pumps starts when the provider is ready to ride the 5-FU FOLFOX medicine. In colorectal case, it'll be Stage 3 and 4 for example. And then they get the patients in, put the catheter or PICC line, whatever is necessary and the patients then take these pumps away. Because the treatment, for example, colorectal cancer is for a period of up to 6 months. And then this gives the patients the mobility. This gives them the satisfaction, and we have seen some very good results from the utilization of the pumps. Our billing starts from the time the pump utilization starts, that means, it's been taken off the shelf and the customer starts utilizing it, and we charge on a monthly basis for our pump rental. On the sales side, the cycle is -- our providers could be hospitals, could be large clinics, could be oncology clinics who own their own pumps. They're running short of pumps. Because we carry a fleet of 70 different kinds of pumps, and personally I was -- I can tell you that we keep these pumps totally up to date from a point of view of servicing and proper usage. So then they call us or we call them and say, if you need a fleet of such and such pumps, especially when there are shortages of these pumps, or the threshold for these providers is beyond what they actually own, then they'll come to us and said, we'd like to rent 10 pumps, 15 pumps and 20 pumps or buy so many pumps, and then we go and sell those pumps to them. So we are pretty flexible in terms of rental versus sales. We want to be seen as a one-stop shop for providing pump as a service, and that's how the cycle looks like. A typical cycle on the rental side could be from the time we entered the customer, which is our provider, to the time we start the revenue cycle, could be 6 months. And on the sales side, it could be as short as 1 week. Because they're really in need, are in need of these pumps, so we can ship them very quickly. So I hope this helps you to understand our sales process.

The next question is from Michael Potter from Monarch Capital Group.

Just a couple of questions. You mentioned in the release, I guess we had an increase in our same customers, we added new customers, and we also had a bump in revenue from change in billing, or I guess from billing customers directly. Can you break that out? What was the same customer sales growth and the revenue from new customers for the quarter and for the year?

Michael, for competitive reasons, we don't break that out. I will tell you though, in general terms, the landing larger customers is definitely one of the ways that we do focus on is focusing on the larger pump facilities on the third-party payer side. On our pure rental business, B2B type sales, those can come in smaller, smaller gains. I will tell you that the organic growth of this company is what's driving sales growth.

Okay. You also reported adjusted EBITDA. Does the adjusted EBITDA take into account the $600,000 retention payment that was paid during the year and also stock compensation because I don't see that as line items?

No. It does include the $600,000 retention related to the concerned stockholder issue. We...

So the $600,000 is included in the $2.2 million?

Yes. And we did not add back stock compensation. We've internally kind of debated whether we add that back or not. But no we haven't. That is just always something that we are trying to make sure we get the correct amount to the -- present it to the investors. So no, we did not add back the stock compensation.

Okay. And what do you anticipate, what's the CapEx budget for 2013?

Again, for -- since pumps equal revenue in our business, it is a direct correlation. We don't disclose that either.

Pumps only equal revenue when you're giving the utilization rate, which you're not giving.

Well, no. We only buy pumps when we know that we need them. The timeline for us between order and delivery is, what Jan, 3 weeks, generally?

3 to 4 weeks.

3 to 4 weeks. So we only order pumps on our third-party payer side, or our rental side when we know we have customers coming on because typically there is a delivery date, an exchange date. So from that standpoint, pumps equal revenue in this business.

Right. And we're constantly working to manage our fleet and make sure that we're forecasting new accounts as they come on and have a good handle on what their pump needs are going to be.

Next question is from Boris Peaker from Oppenheimer. Boris Peaker - Oppenheimer & Co. Inc., Research Division: I just wanted a little more clarification, you mentioned clearly, you have 2 lines of business here, sales and rental of pumps. On the sales side, I'm just curious if you're seeing any kind of trend in the industry because it would seem to me people that are probably buying pumps are unlikely to be going into renting pumps in the future. So I just wanted to kind of get your thoughts on that.

Good question. From a standpoint of whether it's sales or rentals with our customer base, it really varies in the health care industry, whether a hospital or a facility is tied on their CapEx budget. If they are, then rental is the way for them that they prefer to go. From a standpoint if they have additional CapEx, and they're looking at rentals and they believe they have a good base business, then they will probably opt for sales because that would generally be a lower cost of ownership for them, if they have the capital and a good cost of capital. One of the reasons on the B2B side that our rental businesses provide such a service is that during, say for example a flu season, that they can rent from us and then when patients are gone and their billings are gone, they can get rid of the -- they change a fixed charge into a variable charge. That was our last question.

Sorry, yes, that was our last question. I'll turn it back over to you Jonathan, if you have any final remarks.

Great. I think I'll turn it over to Dilip. I think he has some closing items.

Thank you all for participating in the call. In conclusion, we are encouraged by our continued progress and the opportunities available for us. I would like to thank my Board of Directors, executive management team, all employees, partners and General Counsel of InfuSystem for this past year and making this personally and professionally a very happy and productive year for all of us. Thank you, and goodbye.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.