Good morning, everyone, and welcome to the InfuSystem Holdings Second Quarter 2014 Conference Call. This is your operator, Sylvia. Let me first give you to Mr. Jonathan P. Foster, Chief Financial Officer.

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 and the company's Form 10-Q for the second quarter of 2014 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 within the meaning of the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995, the Securities Act of 1933 and the Securities Exchange Act of 1934 that involve risk and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risk and uncertainties include general economic conditions, as well as other risks detailed from time to time in 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 are 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, and that may be updated from time to time in the quarter release Form 10-Q, including the Forms 10-Q for the most recent quarter and the form 8-K filed this morning. 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, as previously mentioned. With that, I would like to turn the call over to Mr. Eric Steen, our Chief Executive Officer.

Good morning, everyone, and thank you for joining the InfuSystem Holdings Inc. 2014 second quarter conference call. Joining me today are Jan Skonieczny, Chief Operating Officer; and Jon Foster, Chief Financial Officer. There are 3 things that I would like to talk about today: an update on the initiatives that are driving our revenue growth, an update on our operational improvements and how these are driving efficiencies and an update on our strategic plan implementation and how this impacts our future growth and guidance. But first, let me briefly discuss our Q2 results. Revenues in the second quarter of 2014 were $16.4 million, up 12% from the second quarter of 2013. Revenue for the for the first 6 months is up 14% versus prior year-to-date. Gross profit for the second quarter is $11.9 million, up 15% quarter-over-quarter. And for the first 6 months, we are up 16% in gross profit. Net income was $900,000 in the second quarter. Now year-to-date, net income is $1.5 million, or $0.07 a share, compared to $0.01 per share a year ago. Now I'd like to discuss some of the things that are driving the 14% year-to-date revenue and 16% gross profit growth. Our biggest business of providing ambulatory pumps to oncology clinics is growing. Compared to our brand competitors, we are doing a much better job of the missionary work of converting new clinics to the InfuSystem concept, which does not require that our partner clinics purchase, own, track, repair and certify ambulatory infusion pumps. Additionally, our rental and lease business of supplying pumps to home infusion therapy companies and other non-acute care providers is at an all-time high. Rental revenue for both businesses is up over 10% year-to-date. Our electronic connectivity efforts are helping to drive rental growth. I will talk more about…

Thank you, Eric. July was quite an active and complicated month on the CMS front. We're still digesting the information and quite frankly, waiting for clarity from CMS on the specifics. CMS did make 2 major announcements pertaining to competitive bidding in the first part of July. The first related to a proposed rule on how to address CMS fee schedules in rural areas not currently part of either the round 1 or round 2 Recompete. This rule proposes methodology to use information from CMS' competitive bid program experienced to adjust the CMS reimbursement in these areas. The major provisions in this proposal are: First, adjust fee schedule amounts for states in different regions of the country based on competitive bidding pricing from competitions in these regions. The regional prices would be limited by a national ceiling, 110% of the average of regional prices; and the floor, 90% of the average of regional prices; second, use national ceiling as adjusted fee for states that are predominantly rural or sparsely populated. And lastly, adjust fee schedule amounts for noncontiguous areas based on the average of competitive bid pricing from these areas or the national ceiling, whichever is higher. The specific reimbursement and the related timetable for external infusion pumps and supplies that InfuSystem provides to CMS patients remain unknown at this time. Secondly, CMS announced plans to Recompete the supplier contracts awarded in Round 2 of the CMS competitive bid program, or CBP. CMS is required by law to Recompete contracts under the CBP at least once every 3 years. The Round 2 contract period for all product categories expires on June 30, 2016. Most product categories from Round 1 Recompete were added to the Recompete for this round, otherwise known as Round 2 Recompete. The good news is that the…

Thank you, Jan, for that in-depth update on CMS. Speaking of government reimbursement, I'm proud to announce that InfuSystem, as a leader in home infused and services, has joined the National Home Infusion Association's Future of Infusion Advisory Council. I look forward to supporting and becoming personally involved in NHIA's efforts to lobby our legislatures to provide more funding for infusion therapy in the home. The patients home should never be referred to as an alternate site of care, but should be referred to as the preferred site of care due to not only the intuitively obvious and documented savings that home infusion provides, but also the important healing benefits of being at home with family and loved ones during both treatment and recovery. NHIA contracted with Avalere, a respected Washington DC-based health care policy firm, to study the cost savings that Medicare could realize if there was an appropriate home infusion benefit. Avalere's recently released reported in white paper support legislation that will soon be introduced to Congress. Lastly, let me touch on guidance. I am pleased with our results to date and in continuing guidance of high-single-digit revenue growth through the end of 2015. Now I'd like to ask Jon Foster to take us through the numbers.

Thank you, Eric. First, let me discuss our cost of debt. As I mentioned in our last call, we were working on reducing our cost of debt. On May 9 our recent consistent profitable performance enabled us to enter into the Second Amendment with Wells Fargo and PennantPark to reduce our cost of debt by 150 basis points going forward. This was done with no amenities, just a simple reduction in the interest rates. We explored avenues with lower rates, but such transaction would have come with hefty early termination fees with the current lenders and underwriting and closing fees and expenses. Management will continue to balance future debt requirements to current debt cost structure, any change in covents and the cost benefits if any potential credit agreement to provide the best debt structure for InfuSystem and our shareholders. As I've mentioned in previous calls, InfuSystem has a positive and collaborative relationship with Wells and PennantPark, one we greatly appreciate. Now we'll discuss the financial results for the second quarter in more detail. Revenues in the second quarter of 2014 were $16.4 million, up $1.7 million or 12% from $14.7 million in the second quarter of 2013. During the period, net revenues from rentals increased 9%, while net revenues from product sales increased 51% over the same period in 2013. Revenues for the 6 months ended June 30, 2014 was $33.6 million, 14% increase over the same prior year period. During the period, net revenues from rentals increased 10%, while net revenues from product sales increased 72% over the same period in 2013. The increase in revenues was primarily related to the addition of new customers and increased penetration into existing customer count, both in sales and rentals. Recall that we had an opportunistic product sale during Q1 of a…

Thank you, Jon. In concluding my formal remarks, 3 things: one, revenue was up 14%, gross profit is up 15% year-to-date; rentals and recurring disposable sales are growing; two, electronic connectivity and other IT-driven operational improvements are being made and are having an impact, like not having to open 5,000 work orders a month; three, our strategic plan is being implemented and things are going as expected, except for our planning for reimbursement cuts, which now look delayed as CMS excludes external infusion pumps and supplies from the Round 2 Recompete. Before I ask for questions, I will ask the first one myself. With 14% year-to-date revenue growth, how come no increase in guidance?

Thank you for your question.

We're still looking at the long-term of growing profitable. Growing revenue is easy. Growing profitable revenue is a bit more complicated. Our rental base in disposable sales are growing. However, we still get large onetime capital sales pops to our revenue line when we buy used pumps, recondition them and then sell them as patient ready with a warranty. We've had big sales in fourth quarters of prior years. We could have had bigger sales this past fourth quarter, but I declined some low offers. And now we have had those sales in the first and second quarter more profitably. I will revisit the guidance number with Jon, but I don't want to be in a position where I have my team chasing revenue instead of profits. With that said, I'd like to open up the phone lines in taking questions.

[Operator Instructions] And our first question comes from Joe Munda from Sidoti & Company. Joseph P. Munda - Sidoti & Company, LLC: Eric, I just want to -- a lot of information thrown at us there. We really appreciate it, very in-depth. But I wanted to touch first off on your last comment regarding the guidance, high single-digit growth. After first quarter putting up 17%, this quarter putting up almost 12%, I mean, that would indicate to us that your back half of the year is going to be mid-single-digit growth. But based on the increase in pump purchases that we're seeing in the Q here, I mean, there seems to be a disconnect between that guidance and the purchasing you guys are doing. Any clarity there would be great.

Yes, Joe, when I first met you and people said you need to give a guidance number it was in 2013 and I was giving guidance to the end of 2015 because, as we discussed, I had -- wanted to implement a strategic plan. So I think part of it is just looking for the long term. And I don't want to just get in the habit of giving you the quarter-to-quarter or short-term guidance. So let me relook at the number. Things are going better as expected -- than expected to be sure. But I do want to -- we are looking at some things that we do today that are not profitable. And I do want to be saddled with wanting to keep revenue just for the sake of revenue. Joseph P. Munda - Sidoti & Company, LLC: Okay. That's helpful. As far as the comments regarding opening up new pump centers, can you give us some sense, is there going to be significant CapEx involved there? A, being the facility; and B, being the increase of pumps. Or has that already occurred in the pump purchases?

Well, thanks for that question, Joe. As you may remember, we went through this description when we opened our Houston facility. And so the past operating practice of the company was to return all of our oncology pumps to Madison Heights for cleaning and certification in between patient use. By opening the facility in Houston, just the savings we had in FedEx pays for all the operational cost. And the same thing when we opened in the Northeast. We are going to save so much money. We have most of the big New York City infusion centers. We're going to save so much money just in shipping from New York City alone. That will fund the operational space and it will fund the employees that work there. The number of pumps, well -- I guess the number of pumps goes down because instead of having our capital expense in the FedEx hub, we're going to have our capital expense on the ground ready to be used. So I think what it does for us, it saves the shipping cost, which funds the local facility, it lowers our CapEx by having the pumps there. And then another important strategic thing is it puts us in the same-day rental business along the Atlantic seaboard when we opened in the Northeast. So for today, we rent pumps. We have, as you know -- you know a lot about our business. We have a lot of home infusion companies that rent pumps for us when they have peaks in demand. And so today, we can serve those fine home infusion companies with next-day delivery. Now with the center in L.A., center in Houston, Kansas City, Detroit and the Northeast, we'll be able to serve the Northeast, the Great Lakes, the planes, the Southwest and the West all with same-day delivery. And then at one point if you may remember the strategic planned presentation I did for investors at your conference, we eventually plan to open one in the Southeast as well. But one step at a time and -- but the operational efficiencies actually lowers our cost, improves our utilization and positions us in a new business area of opportunity. Joseph P. Munda - Sidoti & Company, LLC: Okay. Eric, in your comments there, you said the pump fleet would come down, the pump number would actually come down as a result of the opening of these new facilities.

Eventually because we're going to have less pumps in the year via FedEx. So I'm not planning on getting rid of any of our existing pumps at all, no way. We're going to continue to grow our pump fleet, but we're adding new customers quickly as you can see from the numbers. Our rental is up 10%. So we're buying pumps, we're adding to the fleet, but when we become more efficient with more local facilities, we're going to be able to stretch that fleet and get better utilization out of it. Joseph P. Munda - Sidoti & Company, LLC: Okay. So we're not expecting pump sales in immediate term as a result -- because you had talked about some lumpiness as far as some of those numbers are concerned. Are we -- so we're not expecting, as a result of the opening of these facilities, any outsize sales of pumps just to get to the number?

No, no. Our popular models of pumps that we rent, we're going to hang on to those. The pump sales we have -- these onetime pump sales we have, a lot of times those aren't even ambulatory pumps because there's a lot more pumps or the pole-mounted pumps they use hospitals. And the previous first biomedical that InfuSystem purchased, they have a great network of buying these hospital pumps that come off of leases or the hospital changes to a new model, and our -- what we call our trader broker desk. We buy those pumps. We recondition them in our iso- certified facility to get them up to meet manufacture standards and get them looking like new and then we resell those primarily pole-mounted hospital pumps. And so when you see those big spikes in sales, like -- our product revenue was up 72% this -- so far this year. That's not from selling sets, although I'm happy to see there are IV disposable pumps, it's growing. That's from selling a bunch of pole-mounted hospital pumps that I could have sold in December, come out with a bigger number at the end of the year but at a lower GP and instead we held off and took a better offer on those pumps in the -- primarily in the first quarter of this year. So I think that's what I -- I think I'm indelibly etched as being a middle manager with a public company who did things like sell your first quarter goods in this fourth quarter and then wonder why the fourth quarter doesn't look good. I just don't want to be get stuck in that kind of a trap. But I am going to revisit the guidance with Jon, and I promise to get back with you after I do that.

If I could add, Eric, if you recall, Joe, that during '12 and '13, we were fairly tight on liquidity. So for you to have opportunistic pump sales, you got to have opportunistic pump purchases. Now since we've had the new credit facility for over a year now, we've had the liquidity that when we've had opportunities to do opportunistic pump purchases, we've been able to do it. And so from that standpoint, we have the liquidity to enable our broker dealer desk to do its job.

And our next question comes from Doug Weiss [ph] from ESW [ph] Investment.

So just to make sure I understood the comments on CMS correctly, it sounded like you don't know the exact date that the Recompete would take place, but it sounded like you were looking somewhere around 2019? Did I get that right?

No, the Recompete is already taking place. That process has begun and those contracts will begin July. The middle of July 2016, and they will end December 31, 2019. And what we do know today is that our category of external infusion pumps have been excluded from that Round 2 Recompete.

Right.

The piece that we're not sure about is what types of additional cuts will be made to those product categories that are not included in this next round of competitive bidding.

In other words, cost could be made arbitrarily outside of the bidding process?

I don't think they'll be arbitrary. I think -- as I mentioned in the first part of my discussion, CMS is working hard to develop some additional methodologies on how to treat some of those other areas and other products with respect to price cuts. And so what they're doing is they're using some of the knowledge and intelligence that they've gained from previous rounds of competitive bidding to determine how to make those cuts.

And it basically establish in their proposal a floor of 70 -- of 90% of their average of the regional price they got from competitive bid process and a ceiling of 110%. But they really haven't discussed how they're going to determine where the prices fall and when within those averages.

Right. Okay. And then on...

And if I can add.

Sorry, go ahead.

No, just one last thing. If you go to CMS' website, they deal in seasons. They say generally deal in dates. They'll say they will announce the rules for competitive bidding for Round 2 Recompete in fall of 2014, so that just kind of shows you the timetables that we're dealing with.

Right, okay. And then on some of the investments you described. Are those primarily being capitalized? Or are those resulting in spike up on some of the expense lines?

Both. From a standpoint of -- as we've talked about, year-to-date, investment and IT, information technology and pain management has increased spend -- expenses by roughly $400,000. Also on the balance sheet, we've capitalized some software cost as well. That is included in the spike in our investment that we've -- that I mentioned in the call.

Okay. And then just -- not to harp too much on the guidance, but just on the -- on your -- in terms of the seasonality on the rental side, would you expect the same kind of pattern that we saw last year where it was somewhat backend loaded in terms of rental numbers?

I would say, yes. I know -- and the one thing that spikes up the pump rentals is a good flu season and that generally happens in the winter. So I think typically the company historically see bigger revenues at the -- towards the end of the year.

Okay. So you think you'll -- I mean, you had pretty strong sequential numbers last year in the third quarter, fourth quarter. I'm assuming somewhat of a slowdown in terms of year-over-year growth. Am I -- is that realistic? Or do you still think you might do pretty good kind of mid to high-single digit?

Well I'm an optimist and so I think you're going to do great. I think we're going to blow the numbers out. But what I don't want to do is, especially when I -- I took the position and some people told me, hey in this company, there's been a lot of promises. And so I want to promise a lot, but I want to always deliver more than I promise.

Okay, that makes sense. On -- then just looking through the rest of the year on the doubtful accounts and that was a nice sequential drop here, I guess, which was what you had -- kind of expected. Would that -- is this kind of a good run rate going forward? And would that -- would it be a good run rate on an absolute basis? Or as a percentage of rental revenue?

We're trying to decrease it. I mean, our efforts are just beginning to take hold so I think that's an indication that we're expecting better results as we continue the process of increasing our collection efforts.

Okay. And then on taxes, how much of that tax reported GAAP tax is actually paid in cash?

Our main -- really the only -- we have some small payments that are due in states where that we don't have NOLs. We're -- we just now expanded into them. Our main cash pay is in Canada, which is generally $300,000 to $500,000 a year. We ended the year of 2013 with roughly $14 -- a little over $14 million in federal and state NOLs, but most of that is just booked tax expense and the cash expenses mainly in Canada.

Okay. So you still have -- so you still have -- you'll finish the year, it looks like, with -- if you do a couple of million in earnings that would bring your NOLs down to about $12 million. Is that the right way to think of it?

Yes, thereabouts. I mean, taxes all depends based on what new laws come out and -- but yes exactly. We will definitely end the year with NOLs and right now, we forecast -- since we -- they're on our balance sheet as an asset, before cash that we'll be able to get full use of those NOLs.

And we have no further questions at this time. Mr. Foster, I turn the call back to you.

Okay. Thanks for joining today. We'll talk to you next quarter.

Have a great day.