Revenue during the quarter dropped 5.93 percent to $17.23 million from $18.31 million in the previous year period. Gross margin for the quarter contracted 1001 basis points over the previous year period to 60.31 percent. Total expenses were 96.66 percent of quarterly revenues, up from 87.28 percent for the same period last year. That has resulted in a contraction of 938 basis points in operating margin to 3.34 percent.

Operating income for the quarter was $0.58 million, compared with $2.33 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $3.42 million compared with $4.65 million in the prior year period. At the same time, adjusted EBITDA margin contracted 559 basis points in the quarter to 19.82 percent from 25.42 percent in the last year period.

Eric K. Steen, chief executive officer of InfuSystem, said, “The financial results of the third quarter of 2016 were impacted by many factors, several which were one-time events. Our world changed quickly when in April 2016, the Center for Medicare and Medicaid Services (“CMS”) instituted industry wide changes to the reimbursement process for Medicare patients utilizing at-home ambulatory pumps for oncology treatments. We responded quickly and took 1,800 infusion clinics to a direct bill to the provider business model, all while rolling out a new IT system and continuing to run two Medicare processes, as we continued to bill for treatments prior to July 1, 2016. We took the opportunity to put a number of things behind us as a result of changes in the market and in our internal processes. We had one-time non-recurring costs of approximately $1 million in the quarter. Additionally, as we closed the third quarter, we noticed a formula error related to our revenue recognition estimation model, which was announced on November 7, 2016. As a result, with the assistance of independent outside professionals, we restated our financial results for 2015 and the first and second quarters of 2016. We are confident that we have taken the necessary steps to correct and implement the appropriate internal controls to strengthen our financial reporting.”

The company has spent $4.69 million cash to meet investing activities during the nine month period as against cash outgo of $12.69 million in the last year period. It has incurred net capital expenditure of $4.49 million on net basis during the nine month period, down 33.94 percent or $2.31 million from year ago period.

Cash flow from financing activities was $1.20 million for the nine month period, down 84.51 percent or $6.57 million, when compared with the last year period.

Cash and cash equivalents stood at stood at $1.07 million as at Sep. 30, 2016.