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Liberator Medical Reports Revenue of $18.6 Million for Its Fiscal Third Quarter Ended June 30, 2014

Companies mentioned in this article: Liberator Medical Holdings, Inc.

STUART, FL--(Marketwired - August 14, 2014) - Liberator Medical Holdings, Inc. (NYSE MKT: LBMH) today announced the financial results for its fiscal third quarter ended June 30, 2014.

Net sales for the three months ended June 30, 2014, increased by $1,087,000, or 6.2%, to $18,578,000, compared with net sales of $17,491,000 for the three months ended June 30, 2013. Net sales for the nine months ended June 30, 2014, increased by $3,058,000, or 5.9%, to $54,834,000, compared with net sales of $51,776,000 for the nine months ended June 30, 2013. The increase in net sales was primarily due to our continued emphasis on our direct response advertising campaign to acquire new customers and our emphasis on customer service to maximize the reorder rates for our recurring customer base.

                                                                            
----------------------------------------------------------------------------
                       Three Months Ended June 30  Nine Months Ended June 30
----------------------------------------------------------------------------
Dollars in Thousands   Q3 FY2014 Q3 FY2013    %   Q3 FY2014 Q3 FY2013    %  
----------------------------------------------------------------------------
Net Sales              $ 18,578  $ 17,491    6.2  $ 54,834  $ 51,776    5.9 
----------------------------------------------------------------------------
Gross Profit           $ 11,751  $ 10,893    7.6  $ 34,514  $ 32,604    5.9 
----------------------------------------------------------------------------
Net Income             $  1,983  $  2,014   (1.5) $  5,716  $  4,786   19.4 
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Income from operations for the three months ended June 30, 2014, decreased by $240,000, or 7.2%, to $3,116,000, compared with the three months ended June 30, 2013. The decrease in operating income is primarily attributed to an increase in advertising expense, general and administrative expenses, and bad debt expense. 

For the nine months ended June 30, 2014, income from operations increased by $1,241,000, or 15.6%, to $9,213,000, compared with the nine months ended June 30, 2013. The increase in operating income is primarily attributed to increased gross profits driven by our increased sales volumes as well as a reduction as a percentage of sales in payroll and bad debts expense.

Net income for the third quarter of fiscal year 2014 was $1,983,000 or $0.04 per diluted share, compared with net income of $2,014,000 or $0.04 per diluted share, for the third quarter of fiscal year 2013. Net income for the nine months ended June 30, 2014 was $5,716,000 or $0.11 per diluted share, compared with net income of $4,786,000 or $0.09 per diluted share, for the nine months ended June 30, 2013 an increase of 19.4%.

The Company had cash of $10,264,000 at June 30, 2014, compared with cash of $12,453,000 at September 30, 2013, a decrease of $2,189,000. The decrease in cash for the nine months ended June 30, 2014, was primarily due to $3,945,000 of cash used in financing activities and, $310,000 of cash used in investing activities, partially offset by $2,066,000 of cash provided by operating activities.

"During our fiscal third quarter we made key investments in our organizational infrastructure to improve the efficiency and performance of our customer-facing staff. These expenditures resulted in higher general and administrative expenses in the quarter. We are investing in acquiring and serving our customers, which is central to our mission as a healthcare products provider and to achieving the maximum return on our advertising expenditures. We are pleased that we have grown sales and income over the last nine months and we will continue to make investments that support our growth and create efficiencies that improve our operating margins," commented Mark Libratore, President and CEO. 

Stay up-to-date with current events by visiting Liberator Medical's website at www.liberatormedical.com or by joining the Company's E-Mail Alert List. Join by clicking the following link www.LBMH-IR.com.

About Liberator Medical Holdings, Inc.

Liberator Medical Holdings, Inc.'s subsidiary, Liberator Medical Supply, Inc., established the Liberator brand as a leading national direct-to-consumer provider of quality medical supplies to Medicare-eligible seniors. Accredited by The Joint Commission, our Company's unique combination of marketing, industry expertise and customer service has demonstrated success over a broad spectrum of chronic conditions. Liberator is recognized for offering a simple, reliable way to purchase medical supplies needed on a regular, ongoing, repeat-order basis, with the convenience of direct billing to Medicare and private insurance. Liberator's revenue primarily comes from supplying products to meet the rapidly growing requirements of general medical supplies, diabetes supplies, catheters, ostomy supplies and mastectomy fashions. Liberator communicates with patients and their doctors on a regular basis regarding prescriptions and supplies. Customers may purchase by phone, mail or internet, with repeat orders confirmed with the customer and shipped when needed.

Safe Harbor Statement

In this press release and in related comments by our management, our use of the words "expect," "anticipate," "possible," "potential," "target," "believe," "commit," "intend," "continue," "may," "would," "could," "should," "project," "projected," "positioned" or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Such risks and uncertainties may include, but are not limited to, regulatory limitations on the medical industry in general, working capital constraints, fluctuations in customer demand and commitments, fluctuation in quarterly results, introduction of new services and products, commercial acceptance and viability of new services and products, pricing and competition, reliance upon subcontractors and vendors, the timing of new technology and product introductions, and the risk of early obsolescence of our products. Liberator's most recent annual report on Form 10-K and quarterly reports on Form 10-Q provide information about these and other factors, which we may revise or supplement in future reports filed with the Securities and Exchange Commission.

                                                                            
             Liberator Medical Holdings, Inc. and Subsidiaries              
                   Condensed Consolidated Balance Sheets                    
          As of June 30, 2014 (unaudited) and September 30, 2013            
              (In thousands, except dollar per share amounts)               
                                                                            
                                                  June 30,    September 30, 
                                                    2014           2013     
                                               -------------  ------------- 
                    Assets                                                  
Current Assets:                                                             
  Cash                                         $      10,264  $      12,453 
  Accounts receivable, net of allowances of                                 
   $4,552 and $4,502, respectively                     8,998          7,836 
  Inventory, net of allowance for obsolete                                  
   inventory of $339 and $308, respectively            2,085          2,187 
  Deferred tax assets                                  2,110          2,067 
  Prepaid and other current assets                       931            219 
                                               -------------  ------------- 
    Total Current Assets                              24,388         24,762 
Property and equipment, net of accumulated                                  
 depreciation of $3,913 and $3,492,                                         
 respectively                                            908          1,044 
Deferred advertising, net                             25,721         22,705 
Intangible assets, net of accumulated                                       
 amortization of $252 and $169, respectively             449            414 
Other assets                                             175            174 
                                               -------------  ------------- 
Total Assets                                   $      51,641  $      49,099 
                                               =============  ============= 
                                                                            
     Liabilities and Stockholders' Equity                                   
Current Liabilities:                                                        
  Accounts payable                             $       5,080  $       4,915 
  Accrued liabilities                                  1,738          1,354 
  Dividends payable                                    1,589          1,569 
  Income tax payable                                     227          1,195 
  Other current liabilities                               83            111 
                                               -------------  ------------- 
    Total Current Liabilities                          8,668          9,144 
Deferred tax liabilities                               9,447          8,561 
Credit line facility                                   1,500          1,500 
Other long-term liabilities                              126             63 
                                               -------------  ------------- 
Total Liabilities                                     19,790         19,268 
                                               -------------  ------------- 
                                                                            
Stockholders' Equity:                                                       
Common stock, $0.001 par value, 200,000 shares                              
 authorized, 53,318 and 52,637 shares issued,                               
 respectively; 52,964 and 52,283 shares                                     
 outstanding at June 30, 2014, and September                                
 30, 2013, respectively                                   53             53 
Additional paid-in capital                            36,160         35,111 
Accumulated deficit                                   (3,882)        (4,853)
Treasury stock, at cost; 354 shares at June                                 
 30, 2014, and September 30, 2013                       (480)          (480)
                                               -------------  ------------- 
Total Stockholders' Equity                            31,851         29,831 
                                               -------------  ------------- 
Total Liabilities and Stockholders' Equity     $      51,641  $      49,099 
                                               =============  ============= 
                                                                            
                                                                            

See accompanying notes to unaudited condensed consolidated financial statements. 

                                                                            
             Liberator Medical Holdings, Inc. and Subsidiaries              
              Condensed Consolidated Statements of Operations               
        For the three and nine months ended June 30, 2014 and 2013          
                                (Unaudited)                                 
                  (in thousands, except per share amounts)                  
                                                                            
                                  Three Months Ended     Nine Months Ended  
                                       June 30,              June 30,       
                                 --------------------  -------------------- 
                                    2014       2013       2014       2013   
                                 ---------  ---------  ---------  --------- 
                                                                            
Net Sales                        $  18,578  $  17,491  $  54,834  $  51,776 
                                                                            
Cost of Sales                        6,827      6,598     20,320     19,172 
                                 ---------  ---------  ---------  --------- 
                                                                            
Gross Profit                        11,751     10,893     34,514     32,604 
                                 ---------  ---------  ---------  --------- 
                                                                            
Operating Expenses                                                          
  Payroll, taxes and benefits        3,650      3,570     10,988     11,079 
  Advertising                        2,553      2,146      7,250      6,617 
  Bad debts                            845        541      2,487      2,986 
  Depreciation and amortization        166        171        505        509 
  General and administrative         1,421      1,109      4,071      3,441 
                                 ---------  ---------  ---------  --------- 
Total Operating Expenses             8,635      7,537     25,301     24,632 
                                 ---------  ---------  ---------  --------- 
                                                                            
Income from Operations               3,116      3,356      9,213      7,972 
                                 ---------  ---------  ---------  --------- 
                                                                            
Other Expenses                         (12)       (20)       (38)       (62)
                                 ---------  ---------  ---------  --------- 
                                                                            
Income before Income Taxes           3,104      3,336      9,175      7,910 
                                                                            
Provision for Income Taxes           1,121      1,322      3,459      3,124 
                                 ---------  ---------  ---------  --------- 
                                                                            
Net Income                       $   1,983  $   2,014  $   5,716  $   4,786 
                                 =========  =========  =========  ========= 
                                                                            
Basic earnings per share:                                                   
Weighted average shares                                                     
 outstanding                        52,823     51,837     52,585     49,387 
Earnings per share               $    0.04  $    0.04  $    0.11  $    0.10 
                                                                            
Diluted earnings per share:                                                 
Weighted average shares                                                     
 outstanding                        53,619     52,393     53,513     52,386 
Earnings per share               $    0.04  $    0.04  $    0.11  $    0.09 
                                                                            
Dividends declared per common                                               
 share*                          $    0.03  $    0.05  $    0.09  $    0.05 
                                                                            
                                                                            

 * Two quarterly dividends were declared during the three months ended June 30, 2013

See accompanying notes to unaudited condensed consolidated financial statements.

                                                                            
             Liberator Medical Holdings, Inc. and Subsidiaries              
              Condensed Consolidated Statements of Cash Flows               
             For the nine months ended June 30, 2014 and 2013               
                                (Unaudited)                                 
                               (in thousands)                               
                                                                            
                                                       Nine Months Ended    
                                                           June 30,         
                                                   ------------------------ 
                                                       2014         2013    
                                                   -----------  ----------- 
Cash flow from operating activities:                                        
  Net Income                                       $     5,716  $     4,786 
  Adjustments to reconcile net income to net cash                           
   provided by operating activities:                                        
    Depreciation and amortization                        7,702        6,996 
    Equity based compensation                              184           63 
    Provision for doubtful accounts and                                     
     contractual adjustments                             2,685        3,214 
    Deferred income taxes                                  843        2,153 
    Reserve for inventory obsolescence                      31          157 
  Changes in operating assets and liabilities:                              
    Accounts receivable                                 (3,848)      (1,230)
    Deferred advertising                               (10,213)      (6,975)
    Inventory                                              107          547 
    Other assets                                          (692)         (95)
    Income taxes prepaid and payable                      (968)         860 
    Accounts payable                                       165       (2,282)
    Accrued liabilities                                    376          374 
    Other liabilities                                      (22)          (7)
                                                   -----------  ----------- 
Net Cash Flow Provided by Operating Activities           2,066        8,561 
                                                   -----------  ----------- 
                                                                            
Cash flow from investing activities:                                        
  Purchase of property and equipment                      (153)        (361)
  Proceeds from sale of property and equipment               4            - 
  Acquisition of business                                 (161)           - 
                                                   -----------  ----------- 
Net Cash Flow Used in Investing Activities                (310)        (361)
                                                   -----------  ----------- 
                                                                            
Cash flow from financing activities:                                        
  Proceeds from employee stock purchase plan                 -           48 
  Proceeds from exercise of stock options and                               
   warrants                                                694          153 
  Cash dividends paid                                   (4,725)      (1,044)
  Costs associated with credit line facility               (21)         (21)
  Income tax benefit related to exercise of stock                           
   options                                                 171            - 
  Payments of capital lease obligations                    (64)         (52)
                                                   -----------  ----------- 
Net Cash Flow Used in Financing Activities              (3,945)        (916)
                                                   -----------  ----------- 
                                                                            
Net increase (decrease) in cash                         (2,189)       7,284 
                                                                            
Cash at beginning of period                             12,453        3,326 
                                                   -----------  ----------- 
Cash at end of period                              $    10,264  $    10,610 
                                                   ===========  =========== 
                                                                            
                                                                            

See accompanying notes to unaudited condensed consolidated financial statements.


Contact:

Contacts:

Individual Investor Relations Contact
WSR Communications
772-219-7525
IR@WSRcommunications.com
http://wsrcommunications.ir.stockpr.com/liberatormedical

Institutional Investor Contact
Robert J. Davis
Liberator Medical Holdings, Inc.
772-463-3737
bdavis@liberatormedical.com
www.liberatormedical.com