Good afternoon, everyone, and welcome to the InfuSystem's Holdings Q2 2017 Conference Call. This is your operator, Victoria. And at this time, I would like to turn the call over to Joe Dorame. Joe, you may begin.

Thank you. Good afternoon, and thank you for joining us today to review the financial results of InfuSystem Holdings for the second quarter of 2017, which ended on June 30, 2017. As the operator indicated, my name is Joe Dorame. I'm with Lytham Partners, and we are the Investor Relations consulting firm for InfuSystem. With us today representing the company are Gregg Lehman, Executive Chairman; and Chris Downs, Interim CFO. After the conclusion of today's prepared remarks, we will open the call for a question-and-answer session. If anyone participating on today's call does not have a full text copy of the press release, you can retrieve it from the company's website at infusystem.com, or numerous other financial websites. Before we begin with prepared remarks, I would like to remind everyone certain statements made by the management team of InfuSystem during this conference call constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Except for the statements of historical facts, this conference call may contain forward-looking statements that involve risks and uncertainties, some of which are detailed under Risk Factors in documents filed by the company with the United States Securities and Exchange Commission, including the annual report on Form 10-K for the year-ended December 31, 2016. Forward-looking statements speak only as of the date the statements were made. The company can give no assurance that such forward-looking statements will prove to be correct. InfuSystem does not undertake, and specifically disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Now I'd like to turn the call over to Gregg Lehman, Executive Chairman of InfuSystem. Gregg?

Thank you, Joe. Good afternoon to all of you joining us on today's call. Thank you for your interest in InfuSystem Holdings. We appreciate your taking time to learn more about the company. I am joined on today's call by Chris Downs, our Interim Chief Financial Officer; Trent Smith, Chief Accounting Officer; Jan Skonieczny, our Executive VP of Operations; and Rich DiIorio, who heads up our oncology sales group, will join us for the Q&A section of call. As you all know, InfuSystem went through a management change during the just completed quarter. This is my first participation on the quarterly financial results conference call as a member of the Office of the President that was established in May 2017. The rationale for the Office of the President is to refocus the company on the fundamentals, the basic blocking and tackling of operating our business. The InfuSystem business has been around for more than 30 years. And the basics of our operations are fairly simple. We rent infusion pumps used in medical procedures and bill either the medical facilities or the patient's third-party insurance provider. Our employees know how to do this job. Many of our executives have been with the company for more than a decade. They have managed the business through our various ups and downs, and they're certainly familiar with what works and what doesn't work. Starting in May, we asked our team leaders to return to best practices to redeploy our assets in ways that will allow us to drive operational efficiencies, improve our cash flow and allow the company to reduce its debt. The change of the company has been dramatic. The members of the Office of the President quickly reoriented the company, working with their departments, to identify the issues, craft solutions and begin…

Thank you, Gregg. For the second quarter of 2017, total net revenues were down 6.5% or approximately $1.2 million to $16.9 million versus the prior year period. This decline is largely attributable to the billing model change for our Medicare patients. Total product sales increased $0.3 million to $2.2 million, an increase of 16% compared to the prior year period. Total net rental revenues were down 9.1% versus prior year to $14.8 million. Gross profit was down 7.2% or $0.8 million versus prior year to $10.3 million, resulting in gross margin of 61.0% versus 61.5% in the prior year period. G&A expenses increased less than 1% to $6.4 million compared to the prior year period, despite, including approximately $1 million of nonrecurring charges related to severance, legal expenses and capital lease termination fees. Operating loss was $1.1 million versus operating profit of $0.4 million in the prior year. Net loss was $1.1 million or $0.05 per diluted share versus income of $0.2 million or $0.01 in the prior year period. Adjusted EBITDA, a non-GAAP financial measure, was down 10.0% to $3.1 million versus $3.4 million in the prior year period, but was up 113% compared to the prior sequential quarter, the first quarter of 2017. EBITDA -- adjusted EBITDA margin decreased slightly from 18.8% in the prior year period to 18.1% in the current quarter, and up 10.7% from 8.1% margin in the first quarter of 2017. Adjusted net loss, a non-GAAP financial measure, was $0.4 million or a loss of $0.02 per diluted share. Net debt -- total debt, net of cash, decreased $2.9 million to $32.1 million in the quarter, as we focused all of our cash towards repaying our debt. Liquidity at June 30 was $8.6 million, consisting of $0.1 million of cash and $8.5 million net…

Thank you, Chris. Victoria, our operator, would you please open the lines for Q&A?

[Operator Instructions] And our first question comes from Andrew Walker from Rangeley.

Pretty nice results considering where you guys are starting from. Just 2 quick questions. So obviously, the focus is on reducing bad debt expense, kind of improving collections. Your quarter-to-date in Q3, have you guys seen kind of continued improvement?

Yes. I think that's safe to say that our efforts that we started on in earnest in May are going to continue, not only through the last half of the year, but continue on into 2018.

Okay. Good. That's great to hear. And could you kind of give a trend through -- so you started the efforts in May. Could you give the trend throughout the quarter, April, May, June, how kind of collections and bad debt is there?

Well, we can give a little visibility to that. I'll ask Jan to just talk a little bit about the efforts that have been going on in our Madison Heights office. And -- we don't usually break things down by the month, but she can give you a little visibility in terms of how that process is working.

Sure. So as you know, beginning in May, we put forth an effort to kind of reassess the resources that we had and make sure that we have staff that was fully trained and capable of doing the new roles that they were brought in to do. So since that time, we've added some additional staff. We've contracted with some outside resources to assist with some of our aged collections. And in addition, putting more emphasis on our patient collection. So I think, all things considered, that effort will continue not only through the end of the year but on -- well into next year as we continue to reduce our accounts receivable and improve our cash flow.

I think in -- just to amplify what Jan said. We're having a lot of success. We just outsourced some of our aged collectible -- receivables just within the last 60 days. So we're just starting to see a little bit of an uptick in that. It'll take time to feather that out probably in the last 2 quarters. But we're seeing significant progress in collections, which was one of our major initiatives. We'll give you a little bit more color as we have better data points in the last 2 quarters than we have right now.

No, that's super helpful and fantastic. Obviously, that's been a concern for a while. So it's great to hear your progress you made on that. And then second question, so it seems like the offices of the -- the executive office is going well. Do you guys plan to continue running like this for the foreseeable future? Or is there a search going on for a new CEO as well?

No. There is no search going on right now. This is Gregg. We're going to continue running the Office of the President indefinitely, at least, I would say, at a minimum through the end of this fiscal year, mainly because it's working so well. And I think it would be more disruptive to go through an executive search right now until we really see -- we harvest some of these results that we've been working on. So we'll give you, obviously, updates as we go on. But right now, it's business as usual with the Office of the President.

[Operator Instructions] Our next question comes from [ Bill Gordon ] from [ Gordon Capital ].

Can you try to age some of the accounts receivable out there in terms of how we're doing with that? How -- just how far behind are we? I'm sorry, accounts payable. I'm sorry.

Just to be clear, is the question on accounts payable or accounts receivable?

Payables.

Payables. No. We're not behind. Towards the end of every quarter, as every -- as most companies do, we slow down the outgoing -- outflowing cash a little bit. But there was nothing out of the ordinary this quarter. We're generally paying on 30-day terms, and so that's about where we're at.

Okay. So let's try the other side of it. What about getting -- how old are some of the stuff there at the -- we do?

On the AR side, yes. I mean, we don't really talk about the aging buckets, but it's nothing out of the ordinary.

What -- can you define ordinary?

Yes. In terms of medical collections, you have -- you can have really old receivables that you still collect on all the way up to getting paid 30 days later.

This is Jan. I can just tell you that our DSO is approximately 64 days.

64?

Yes. That's pretty much in line with our industry.

[Operator Instructions] And at this time, I'm showing no further questions. I'll now turn the call back over to Gregg for closing remarks.

Thank you, Victoria. Again, I want to thank all of you for participating on this call. I want to thank you also for your ongoing support of InfuSystem. We've had an interesting 1.5 years, but I think it's safe to say that we've experienced what the bottom feels like, and we're moving out of the trench and getting back on track. I must -- I'm in the Madison Heights office today, spent time in the Kansas City office. We're doing a lot of employee meetings, and I can honestly say that employee morale and optimism is moving in the right direction. So thanks for your continued support. We look forward to giving you updates during the next quarter -- quarterly release. Thank you, and have a great afternoon.

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