OptimizeRx Reports Fourth Quarter 2018 Results; Net Revenue Up 64% to a Record $6.6 Million, Driving First Profitable Year
Q4 2018 and Full Year 2018 Financial Highlights
- Net revenue increased 64% to a record
$6.6 millionin Q4, and up 75% to a record $21.2 millionfor the full year.
- Operating expense as a percentage of net revenue reduced from 69% to 64% in Q4, and from 67% to 57% for the full year.
- Net loss of
$110,000or $(0.01)per basic share in Q4, and net income of $226,000or $0.02per diluted share in 2018.
- Non-GAAP net income was
$842,000or $0.06per diluted share in Q4, and $3.1 millionor $0.26per diluted share for the full year (see definition of these non-GAAP measures and reconciliation to GAAP, below).
Q4 2018 Operational Highlights
Acquired CareSpeak Communications, enabling OptimizeRxto deliver digital health messaging directly to patients for the first time, thereby better supporting medication affordability and adherence, and bridging the communication gap between pharma and patients.
- Launched pilot of new clinical messaging platform with an established channel partner.
- Signed new pharmaceutical manufacturers for distributing digital health messaging through OptimizeRx’s expanding network of EHR channel partners.
OptimizeRxPresident Miriam Paramoreco-hosted a plenary session, “Addressing Medication Adherence to Improve Quality of Care,” at the 12th Annual Digital Pharma East conference in Philadelphia.
- Joined MSCI USA Microcap Index.
Q4 2018 Financial Summary
Net revenue in the fourth quarter of 2018 increased 64% to a record
Gross margin was 62.2% in the fourth quarter of 2018 down from 63.0% in the year-ago quarter. The company anticipates this to decline slightly in 2019. The company remains focused on improving margins and maintains its gross margin target of at least 55% for 2019.
Operating expenses in the fourth quarter of 2018 were
Net loss on a GAAP basis for the fourth quarter of 2018 was
Non-GAAP net income for the fourth quarter of 2018 was
The company expects to be GAAP profitable on a quarterly basis. Although one-time expenses related to investments and growth initiatives could result in a loss in any given quarter, such as the company’s acquisition of CareSpeak in Q4 2018.
Cash and cash equivalents totaled
Full Year 2018 Financial Summary
Net revenue in 2018 increased 75% to a record
Operating expenses increased to
Net income on a GAAP basis totaled
For the full year, non-GAAP net income totaled
“In Q4, we realized our seventh quarter in a row of revenue growth and our first year of profitability,” said
“As a result of our recent acquisition of
“Today, our network reaches over half the nation’s healthcare providers and the ambulatory market, making
Febbo added: “For 2019, we’ll remain focused on generating revenue from our core messaging solutions and expanding our channel partner network, which now includes reach into the hospital market. Following our participation at the recent HIMSS health IT conference, we are encouraged by the several big players involved in ambulatory and hospital systems who expressed strong interest in working with us.
“As we continue to demonstrate high ROI from pharma marketing spend and deploy new solutions, we expect increasing adoption of our digital health platform by EHRs, hospital systems, and ultimately new and existing pharma clients. As a result, we anticipate healthy revenue growth to continue in 2019, driving greater profitability.”
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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 per share or non-GAAP EPS, both of which are non-GAAP financial measures. The company defines non-GAAP net income (loss) as GAAP net income (loss) with an adjustment to add back depreciation, amortization and stock-based compensation expense. 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. We have provided non-GAAP financial measures to aid investors in better understanding our 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 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 at the end of this press release provides a reconciliation of non-GAAP net income (loss) and non-GAAP EPS for the three and 12-month periods ended
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,’ ‘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
|Cash and cash equivalents||$||8,914,034||$||5,122,573|
|Total Current Assets||15,962,619||8,808,891|
|Property and equipment, net||149,330||167,305|
|Patent rights, net||2,766,944||638,766|
|Other intangible assets, net||2,492,123||143,730|
|Total Other Assets||8,942,629||787,545|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Accounts payable – trade||$||411,010||$||457,289|
|Revenue share payable||1,908,616||1,624,806|
|Total Current Liabilities||4,231,133||3,543,202|
|Contingent purchase price payable||2,365,000||-|
|Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at December 31, 2018 and 2017,||-||-|
|Common stock, $0.001 par value, 500,000,000 shares authorized, 12,038,618 and 9,772,694 shares issued and outstanding at December 31, 2018 and 2017, respectively||12,039||9,773|
|Total Stockholders' Equity||18,458,445||6,220,539|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||25,054,578||$||9,763,741|
Consolidated Statements of Operations
| For the
|Revenue share expense||8,999,666||6,174,614||2,485,855||1,483,671|
|Depreciation and amortization||316,502||324,551||153,085||111,653|
|Other general and administrative expenses||9,189,211||6,855,834||3,266,909||2,245,544|
|Total operating expenses||12,026,565||8,082,774||4,218,860||2,762,554|
|Income (loss) from operations||180,132||(2,129,966||)||(125,447||)||(239,306||)|
|Total other income||46,212||25,937||15,533||2,246|
|Income (loss) before provision for income taxes||226,344||(2,104,029||)||(109,914||)||(237,060||)|
|Provision for income taxes||-||-||-||-|
|Net income (loss)||$||226,344||$||(2,104,029||)||$||(109,914||)||$||(237,060||)|
|Weighted average number of shares outstanding - basic||10,832,209||9,819,753||12,013,771||9,761,675|
|Weighted average number of shares outstanding - diluted||11,862,991||9,819,753||12,013,771||9,761,675|
|Net income (loss) per share - basic||$||0.02||$||(0.21||)||$||(0.01||)||$||(0.02||)|
|Net income (loss) per share – diluted||$||0.02||$||(0.21||)||$||(0.01||)||$||(0.02||)|
Reconciliation of non-GAAP to GAAP Financial Measures
|For the Three Months
Ended December 31,
|For the Year
Ended December 31,
|Net income (loss)||$||(109,914||)||$||(237,060||)||$||226,344||$||(2,104,029||)|
|Depreciation and amortization||153,085||111,653||316,502||324,551|
|Non-GAAP net income (loss)||$||842,037||$||279,950||$||3,063,698||$||(877,089||)|
|Non-GAAP net income (loss) per share|
|Weighted average shares outstanding:|
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Source: OptimizeRx Corporation