OptimizeRx Reports Fourth Quarter and Full Year 2019 Results; Full Year Revenue up 16% to a Record $24.6 Million
Financial and Operational Highlights
- Total revenue in Q4 2019 increased 12% to a record
$7.4 million . - Total revenue for the full year 2019 was up 16% to a record
$24.6 million , with gross margin improving 520 basis points from 57.6% to 62.8% due to a more favorable product mix. - Cash and cash equivalents totaled
$18.9 million atDecember 31, 2019 . - Acquired digital therapeutics SaaS platform provider,
RMDY Health , adding three new client segments to OptimizeRx’s existing patient engagement platform: payers, medtech and medical associations. - Launched newly integrated platform and secured several enterprise deals to more effectively address the need for greater patient-provider-pharma-payer collaboration and improvement in medication affordability and adherence.
- Signed an exclusive three year agreement with NewCrop, a provider of integrated electronic prescribing software, to deliver real-time digital health messages to NewCrop’s e-prescribing network of more than 65,000 healthcare professionals.
Q4 2019 Financial Summary
Net revenue in the fourth quarter of 2019 increased 12% to a record
Over the last year the company has introduced and acquired products and services that have diversified its customer base and revenue streams.
Gross margin in the fourth quarter of 2019 was 60.6% versus 62.2% in the year-ago quarter. The decrease in gross margin was due to a shift in product mix. The company expects to maintain gross margins of at least 60% on a quarterly basis.
Operating expenses in the fourth quarter of 2019 totaled
Net loss on a GAAP basis in the fourth quarter of 2019 totaled
Non-GAAP net loss for the fourth quarter of 2019 was
While the company expects to return to profitability as its revenue grows, one-time expenses related to investments in growth initiatives or non-cash charges could result in a loss in any given quarter.
Cash and cash equivalents totaled
Full Year 2019 Financial Summary
Net revenue in 2019 increased 16% to a record
Gross margin in 2019 improved to 62.8% versus 57.6% in 2018. The improvement was due to a favorable shift in product mix, including an increase in patient engagement revenues that have a much lower cost of sales.
Operating expenses increased to
Net loss on a GAAP basis totaled
For the full year, non-GAAP net income totaled
Management Commentary
“Our topline growth in Q4 and the full year was driven largely by our newer messaging solutions, such as patient engagement,” said
“Today, we have the nation’s largest point of care network for our clients along with a complete set of solutions designed to assure greater adherence, affordability and patient engagement—all of which represent enormous market opportunities.
“Armed with this comprehensive solution set, we are not only better able to address our existing HCP messaging market, but we can now address the patient engagement, digital therapeutics and care management markets. This takes our total addressable market into the billions of dollars. We sit squarely at the intersection of these large and growing markets with a uniquely powerful digital health platform that can scale along the support of fantastic partners and leading pharma clients.
“The power of our platform lies in how we close the communication gap between pharma, payers, physicians and patients like no other solution on the market. Closing this gap with digital solutions has become increasingly important, especially with the wave of new specialty medications coming onto the market and the increasing value being placed on the patient journey when it comes to medication adherence. Better communication translates into better outcomes for patients, lower costs to payers, and for pharma a more engaged field of doctors and patients.
“For OptimizeRx, our integrated platform approach allows us to expand within existing clients and address the needs of a much larger group of potential enterprise clients. This has become evident in the growth of our average deal size, which has increased from around
“Looking ahead, we remain focused on driving revenue growth from our core solutions, expanding our network, and seeking solid M&A and partnership opportunities. We expect the results from these initiatives along with our expanded commercial team to drive continued adoption of our health platform across our entire client base in 2020, with this resulting in another year of record growth and market expansion.”
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Definition and Use of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income (loss) and non-GAAP earnings (loss) per share or non-GAAP EPS, both of which are non-GAAP financial measures. Starting this quarter, the company changed its definition of non-GAAP net income (loss) and non-GAAP earnings per share or non-GAAP EPS to include acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes.
The company defines non-GAAP net income (loss) as GAAP net income (loss) with an adjustment to add back depreciation, amortization, stock-based compensation, acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net income (loss) divided by the number of weighted average shares outstanding on a basic and diluted basis. The company has provided non-GAAP financial measures to aid investors in better understanding its performance. Management believes that these non-GAAP financial measures provide additional insight into the operations and cashflow of the company.
Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash operating expenses, management believes that providing non-GAAP financial measures that excludes non-cash expenses allows for meaningful comparisons between the company’s core business operating results and those of other companies, as well as provides an important tool for financial and operational decision making and for evaluating the company’s own core business operating results over different periods of time.
The company’s non-GAAP net income (loss) and non-GAAP EPS measures may not provide information that is directly comparable to that provided by other companies in the company’s industry, as other companies in the industry may calculate such non-GAAP financial results differently. The company’s non-GAAP net income (loss) and non-GAAP EPS are not measurements of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The company does not consider these non-GAAP measures to be substitutes for or superior to the information provided by its GAAP financial results.
The table, “Reconciliation of non-GAAP to GAAP Financial Measures,” included below, provides a reconciliation of non-GAAP net income (loss) and non-GAAP EPS for the three and 12-month periods ended
About
The cloud-based solution supports patient adherence to medications and better healthcare outcomes with real-time access to financial assistance, prior authorization, education and critical clinical information.
For more information, follow the company on Twitter, LinkedIn or visit www.OptimizeRx.com.
Important Cautions Regarding Forward Looking Statements
This press release contains forward-looking statements within the definition of Section 27A of the Securities Act of 1933, as amended, and such as in section 21E of the Securities Act of 1934, as amended. These forward-looking statements should not be used to make an investment decision. The words 'estimate,' 'possible' and 'seeking' and similar expressions identify forward-looking statements, which speak only as to the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, competition, and other material risks.
Consolidated Balance Sheets as of |
||||||||
2019 Unaudited |
2018 |
|||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 18,852,680 | $ | 8,914,034 | ||||
| Accounts receivable | 7,418,025 | 6,457,841 | ||||||
| Prepaid expenses | 871,043 | 360,146 | ||||||
| Total Current Assets | 27,141,748 | 15,732,021 | ||||||
| Property and equipment, net | 176,014 | 149,330 | ||||||
| Other Assets | ||||||||
| 14,740,031 | 3,678,513 | |||||||
| Technology Assets, net | 6,238,453 | 104,820 | ||||||
| Patent rights, net | 2,550,587 | 2,766,944 | ||||||
| Right of use assets, net | 559,863 | - | ||||||
| Other intangible assets, net | 5,151,102 | 2,387,303 | ||||||
| Security deposits and other assets | 80,727 | 235,647 | ||||||
| Total Other Assets | 29,320,763 | 9,173,227 | ||||||
| TOTAL ASSETS | $ | 56,638,525 | $ | 25,054,578 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable – trade | $ | 492,995 | $ | 411,010 | ||||
| Accrued expenses | 1,800,635 | 1,300,882 | ||||||
| Revenue share payable | 1,618,438 | 1,908,616 | ||||||
| Current portion of lease liabilities | 115,431 | - | ||||||
| Current portion of contingent purchase price payable | 1,500,000 | - | ||||||
| Deferred revenue | 580,014 | 610,625 | ||||||
| Total Current Liabilities | 6,107,513 | 4,231,133 | ||||||
| Non-current Liabilities | ||||||||
| Lease obligations, net of current portion | 448,753 | - | ||||||
| Contingent purchase price payable | 5,220,000 | 2,365,000 | ||||||
| Total Liabilities | 5,668,753 | 2,365,000 | ||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, |
- | - | ||||||
| Common stock, |
14,601 | 12,039 | ||||||
| Additional paid-in-capital | 78,272,268 | 48,725,211 | ||||||
| Accumulated deficit | (33,424,610 | ) | (30,278,805 | ) | ||||
| Total Stockholders’ Equity | 44,862,259 | 18,458,445 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 56,638,525 | $ | 25,054,578 | ||||
Consolidated Statements of Operations |
||||||||||||||
| For the year ended (Unaudited) |
For the year ended |
For the quarter ended (Unaudited) |
For the quarter ended (Unaudited) |
|||||||||||
| Revenue | $ | 24,598,274 | $ | 21,206,363 | $ | 7,379,782 | $ | 6,579,268 | ||||||
| Cost of sales | 9,158,699 | 8,999,666 | 2,906,933 | 2,485,855 | ||||||||||
| Gross margin | 15,439,575 | 12,206,697 | 4,472,849 | 4,093,413 | ||||||||||
| Operating expenses | ||||||||||||||
| Stock-based compensation | 2,260,298 | 2,520,852 | 490,578 | 798,866 | ||||||||||
| Depreciation and amortization | 1,282,787 | 316,502 | 536,859 | 153,085 | ||||||||||
| Other general and administrative expenses | 15,590,054 | 9,189,211 | 5,763,874 | 3,266,909 | ||||||||||
| Total operating expenses | 19,133,139 | 12,026,565 | 6,791,311 | 4,218,860 | ||||||||||
| Income (loss) from operations | (3,693,564 | ) | 180,132 | (2,318,462 | ) | (125,447 | ) | |||||||
| Other income | ||||||||||||||
| Interest income | 288,028 | 46,212 | 95,722 | 15,533 | ||||||||||
| Change in fair value of contingent consideration | (635,000 | ) | - | (660,000 | ) | - | ||||||||
| Total other income | (346,972 | ) | 46,212 | (564,278 | ) | 15,533 | ||||||||
| Income (loss) before provision for income taxes | (4,040,536 | ) | 226,344 | (2,882,740 | ) | (109,914 | ) | |||||||
| Income tax (expense) benefit | 897,960 | - | 897,960 | - | ||||||||||
| Net income (loss) | $ | (3,142,576 | ) | $ | 226,344 | $ | (1,987,780 | ) | $ | (109,914 | ) | |||
| Weighted average number of shares outstanding - basic | 13,387,863 | 10,832,209 | 14,548,910 | 12,013,771 | ||||||||||
| Weighted average number of shares outstanding - diluted | 13,387,863 | 11,862,991 | 14,548,910 | 12,013,771 | ||||||||||
| Net income (loss) per share - basic | $ | (0.23 | ) | $ | 0.02 | $ | (0.14 | ) | $ | (0.01 | ) | |||
| Net income (loss) per share – diluted | $ | (0.23 | ) | $ | 0.02 | $ | (0.14 | ) | $ | (0.01 | ) | |||
Consolidated Statements of Cash Flows for the Years Ended |
||||||||
| For the year ended 2019 (Unaudited) |
For the year ended 2018 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) for the period | $ | (3,142,576 | ) | $ | 226,344 | |||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 1,282,787 | 316,502 | ||||||
| Loss on disposal of assets | - | 2,401 | ||||||
| Stock-based compensation | 2,260,298 | 2,520,845 | ||||||
| Income tax benefit | (897,960 | ) | - | |||||
| Change in fair value of contingent consideration | 635,000 | - | ||||||
| Changes in: | ||||||||
| Accounts receivable | (548,830 | ) | (2,789,252 | ) | ||||
| Prepaid expenses | (343,838 | ) | (319,754 | ) | ||||
| Accounts payable | (46,249 | ) | (83,319 | ) | ||||
| Revenue share payable | (290,178 | ) | 730,810 | |||||
| Accrued expenses | (538,639 | ) | 226,535 | |||||
| Deferred revenue | (30,611 | ) | (38,557 | ) | ||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (1,660,796 | ) | 792,555 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property and equipment | (87,717 | ) | (34,362 | ) | ||||
| Acquisition of intangible assets | (1,500,000 | ) | (56,651 | ) | ||||
| Cash paid in acquisition, net of cash acquired | (8,994,369 | ) | (5,595,820 | ) | ||||
| (10,582,086 | ) | (5,686,833 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock | 21,303,826 | 8,164,475 | ||||||
| Proceeds from exercise of stock options | 877,702 | 521,264 | ||||||
| Redemption of common stock | - | - | ||||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 22,181,528 | 8,685,739 | ||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 9,938,646 | 3,791,461 | ||||||
| CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD | 8,914,034 | 5,122,573 | ||||||
| CASH AND CASH EQUIVALENTS – END OF PERIOD | $ | 18,852,680 | $ | 8,914,034 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Exercise of stock warrants | $ | - | $ | 1,286,424 | ||||
| Lease liabilities arising from right of use assets | 672,809 | - | ||||||
| Common stock issued for debt | $ | - | $ | 447,000 | ||||
| Shares issued in connection with acquisitions | $ | 500,000 | $ | 500,000 | ||||
| Non-cash effect of cumulative adjustments to accumulated deficit | $ | 3,229 | $ | 142,027 | ||||
Reconciliation of non-GAAP to GAAP Financial Measures (Unaudited) |
||||||||||||||
| For the Three Months Ended December 31, |
For the Year Ended |
|||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||
| Net income (loss) | $ | (1,987,780 | ) | $ | (109,914 | ) | $ | (3,142,576 | ) | $ | 226,344 | |||
| Depreciation and amortization | 536,859 | 153,085 | 1,282,787 | 316,502 | ||||||||||
| Stock-based compensation | 490,578 | 798,866 | 2,260,298 | 2,520,852 | ||||||||||
| Acquisition expenses | 799,623 | 607,670 | 799,623 | 607,670 | ||||||||||
| Income or loss related to the fair value of contingent consideration | 660,000 | - | 635,000 | - | ||||||||||
| Deferred income taxes | (897,960 | ) | - | (897,960 | ) | - | ||||||||
| Non-GAAP net income (loss) | $ | (398,680 | ) | $ | 1,449,707 | $ | 937,172 | $ | 3,671,368 | |||||
| Non-GAAP net income (loss) per share | ||||||||||||||
| Basic | $ | (0.03 | ) | $ | 0.12 | $ | 0.07 | $ | 0.34 | |||||
| Diluted | $ | (0.03 | ) | $ | 0.11 | $ | 0.07 | $ | 0.31 | |||||
| Weighted average shares outstanding: | ||||||||||||||
| Basic | 14,548,910 | 12,013,771 | 13,387,863 | 10,832,209 | ||||||||||
| Diluted | 14,548,910 | 13,217,534 | 14,279,087 | 11,862,991 | ||||||||||
OptimizeRx Contact
Tel (248) 651-6568 x807
dbaker@optimizerx.com
Media Relations Contact
Tel (754) 245-7070
malejandra@optimizerx.com
Investor Relations Contact
Tel (949) 432-7557
oprx@cma.team
Source: OptimizeRx Corporation
Note: Since the issuance of this press release at 4:01 p.m. Eastern time on February 27, 2020, the table, “Reconciliation of non-GAAP to GAAP Financial Measures,” above has been updated to correct amounts for depreciation and amortization, non-GAAP net income and non-GAAP net income per share for the full year 2019. The “Full Year 2019 Financial Summary” has also been updated to correct amounts for non-GAAP net income and non-GAAP net income per share for the full year 2019.