News Releases

OptimizeRx Reports Record Second Quarter 2019 Results; Total Revenue Up 37% to $7.0 Million, Net Income up 45% to $407,000 or $0.03 per Diluted Share

August 7, 2019 at 4:01 PM EDT

ROCHESTER, Mich., Aug. 07, 2019 (GLOBE NEWSWIRE) -- OptimizeRx Corp. (NASDAQ: OPRX), a leading provider of digital health messaging for the pharmaceutical industry, reported results for the second quarter ended June 30, 2019. Quarterly comparisons are to the same year-ago quarter.

Q2 2019 Financial and Operational Highlights

  • Total revenue increased 37% to a record $7.0 million.
  • Gross margin improved from 56.1% to 61.6%.
  • Net income totaled a record $407,000, up 45%.
  • Non-GAAP net income up 39% to $1.2 million or $0.09 per diluted share (see definition of non-GAAP measures and reconciliation to GAAP, below).
  • Raised net proceeds of $21.3 million in an underwritten public offering to solidify balance sheet and to provide growth capital for potential acquisitions.
  • Expanded team to support growth, including adding a new chief commercial officer, a VP of sales to focus on the hospital market, and three additional VPs of sales to call on pharma.

Q2 2019 Financial Summary

Total revenue in the second quarter of 2019 increased 37% to a record $7.0 million from $5.1 million in the same year-ago quarter. The increase was primarily due to increased sales of messaging products.

Gross margin improved to 61.6% in the second quarter of 2019 from 56.1% in the year-ago quarter. The improvement was due to a favorable shift in product mix. The company expects to maintain gross margins of at least 60% on a quarterly basis for the remainder of 2019.

Operating expenses totaled $3.8 million, up from $2.6 million in the same year-ago quarter. The increase was related to additional expenses from growth initiatives, as well as the acquisition of CareSpeak Communications which occurred in October 2018.

Net income on a GAAP basis in the second quarter of 2019 was a record $407,000 or $0.03 per share, as compared to net income of $281,000 or $0.02 per share in the year-ago quarter.

Non-GAAP net income for the second quarter of 2019 was up 39% to $1.2 million or $0.09 per diluted share, compared to non-GAAP net income of $852,000 or $0.07 per share in the same year-ago period (see definition of these non-GAAP measures and reconciliation to GAAP, below).

While the company expects to remain GAAP profitable on a quarterly basis, one-time expenses related to investments in growth initiatives could result in a loss in any given quarter.

Cash and cash equivalents totaled $30.5 million at June 30, 2019, as compared to $10.1 million at March 31, 2019. The increase was due to cash generated from operations and an underwritten public offering that raised net proceeds of $21.3 million. The company has continued to operate debt-free and expects to continue to generate positive cash flow from operations on a quarterly basis for the balance of the year.

Management Commentary

“In Q2, we achieved record top and bottom-line results, along with strong gross margin expansion versus the year-ago quarter,” said OptimizeRx CEO, William Febbo. “In fact, it was our ninth straight quarter of revenue growth.

“This performance was driven by several factors, including greater client access and broader provider reach, with this driven by solid technology and strong operational performance. While our revenue is at an all-time high and we are now connected to many manufacturers, our penetration of this market is still at the early stages in many respects.

“We estimate our addressable market opportunity with our traditional network is about $700 million, assuming we had all our all channel partners enabled across all of our solutions. However, since the beginning of the year, we have substantially expanded our total addressable market by adding patient adherence to our solution set. So, we are now able to go after a much larger HCP messaging market estimated at more than $2.4 billion. This focus on adherence also aligns with our passion for helping healthcare providers create better outcomes for their patients.

“To more effectively support greater adherence and deliver financial solutions, we are in the process of integrating our core set of digital solutions into a single platform and adding additional capabilities. We anticipate this new platform to be launched within the next couple of weeks and this will set the stage for continued growth in 2020 and beyond.

“For the remainder of the year, we'll remain focused on generating revenue growth from our core solutions, expanding our network in the hospital market, and seeking solid M&A and partnership opportunities to drive revenue. We expect continued adoption of our health platform across our entire client base, and for this to drive another year of growth, strong margins and profitability.”

Conference Call

OptimizeRx management will host the presentation, followed by a question and answer period.

Date: Wednesday, August 7, 2019
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-800-458-4121
International dial-in number: 1-323-794-2597
Conference ID: 1609655

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through August 28, 2019, as well as available for replay via the Investors section of the OptimizeRx website at investors.optimizerx.com.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 1609655

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. 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 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 six-month periods ended June 30, 2018 and 2019.

About OptimizeRx
OptimizeRx® (NASDAQ: OPRX), a digital health company, connects pharmaceutical companies to patients and providers, offering greater affordability, adherence and brand awareness at the point-of-care. As the nation’s largest point-of-prescribe promotional platform for the pharmaceutical industry, OptimizeRx provides a direct channel for pharma companies to communicate with healthcare providers right within their workflow and also directly to patients. 

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. OptimizeRx provides more than half of the ambulatory patient market with access to these benefits through leading EHR platforms like Allscripts, Amazing Charts and Quest, and directly via its mobile communications platform. 

For more information, follow the company on TwitterLinkedIn 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.


OPTIMIZERx CORPORATION
 CONDENSED CONSOLIDATED BALANCE SHEETS
  

    June 30,
2019
    December 31,
2018
 
    (Unaudited)        
ASSETS            
Current Assets            
Cash and cash equivalents   $ 30,536,420     $ 8,914,034  
Accounts receivable     7,424,499       6,457,841  
Prepaid expenses     627,573       360,146  
Total Current Assets     38,588,492       15,732,021  
Property and equipment, net     162,298       149,330  
Other Assets                
Goodwill     3,678,513       3,678,513  
Patent rights, net     2,658,765       2,766,944  
Other intangible assets, net     3,761,792       2,492,123  
Right of use assets, net     616,988       -  
Other assets and deposits     170,256       235,647  
Total Other Assets     10,886,314       9,173,227  
TOTAL ASSETS   $ 49,637,104     $ 25,054,578  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities                
Accounts payable – trade   $ 911,795     $ 411,010  
Accrued expenses     840,843       1,300,882  
Revenue share payable     1,964,440       1,908,616  
Current portion of lease obligations     111,968       -  
Current portion of contingent purchase price payable     1,074,000       -  
Deferred revenue     769,391       610,625  
Total Current Liabilities     5,672,437       4,231,133  
Non-current Liabilities                
Lease obligations, net of current portion     508,904       -  
Contingent purchase price payable, net of current portion     1,546,000       2,365,000  
Total Non-current liabilities     2,054,904       2,365,000  
Total Liabilities     7,727,341       6,596,133  
Commitments and contingencies                
Stockholders’ Equity                
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at June 30, 2019 or December 31, 2018     -       -  
Common stock, $0.001 par value, 500,000,000 shares authorized, 14,116,739 and 12,038,618 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively     14,117       12,039  
Additional paid-in-capital     71,764,534       48,725,211  
Accumulated deficit     (29,868,888 )     (30,278,805 )
Total Stockholders’ Equity     41,909,763       18,458,445  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 49,637,104     $ 25,054,578  



OPTIMIZERx CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
   

    For the Three Months Ended     For the Six Months Ended
June 30,     June 30,
      2019       2018     2019       2018
                       
NET REVENUE $ 7,006,291     $ 5,099,474   $ 12,215,725     $ 9,211,710
COST OF REVENUES   2,687,143       2,236,751     4,270,623       4,244,842
  GROSS MARGIN   4,319,148       2,862,723     7,945,102         4,966,868
                         
OPERATING EXPENSES   3,839,105       2,589,126     7,332,894       4,884,467
  INCOME FROM OPERATIONS   480,043         273,597     612,208         82,401
                         
OTHER INCOME (EXPENSE)                      
  Interest income   33,574         6,912     55,938         8,929
  Change in Fair Value of Contingent Consideration   (107,000 )     -     (255,000 )     -
                         
   TOTAL OTHER INCOME (EXPENSE) (73,426 )       6,912     (199,062 )     8,929
                         
INCOME BEFORE PROVISION FOR INCOME TAXES 406,617         280,509     413,146         91,330
                         
PROVISION FOR INCOME TAXES   -       -     -       -
NET INCOME  $ 406,617      $   280,509    $ 413,146      $   91,330
                         
WEIGHTED AVERGE SHARES OUTSTANDING              
   BASIC   12,743,379       10,979,086     12,412,442       10,373,326
   DILUTED   13,806,761       11,949,593     13,467,562       11,517,604
                         
EARNINGS PER SHARE                      
   BASIC $ 0.03     $ 0.03   $ 0.03     $ 0.01
   DILUTED   $ 0.03      $ 0.02    $ 0.03     0.01
                         

  
  

OPTIMIZERx CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
   

    For the Six Months
Ended June 30,
 
    2019     2018  
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net Income   $ 413,146     $ 91,330  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:                
Depreciation and amortization     425,873       108,946  
Stock-based compensation     938,399       895,002  
Stock issued for services     241,077       118,820  
Change in fair value of contingent consideration     255,000       -  
Changes in:                
Accounts receivable     (966,658 )     (2,079,823 )
Prepaid expenses and other assets     (202,036 )     40,320  
Accounts payable     785       (280,349 )
Revenue share payable     55,824       (183,664 )
Accrued expenses and other liabilities     (511,976 )     (125,407 )
Deferred revenue     158,766       195,966  
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES     808,200       (1,218,859 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of equipment     (47,739 )     (12,593 )
Purchase of intangible assets     (1,000,000 )     (56,651 )
NET CASH USED IN INVESTING ACTIVITIES     (1,047,739 )     (69,244 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
 Proceeds from issuance of common stock, net of commission costs     22,163,636       9,004,920  
  Expenses related to issuance cost of common stock     (301,711 )     (835,526 )
NET CASH PROVIDED BY FINANCING ACTIVITIES     21,861,925       8,169,394  
NET INCREASE IN CASH AND CASH EQUIVALENTS     21,622,386       6,881,291  
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD     8,914,034       5,122,573  
CASH AND CASH EQUIVALENTS - END OF PERIOD   $ 30,536,420     $ 12,003,864  
                 
SUPPLEMENTAL CASH FLOW INFORMATION:                
Cash paid for interest   $ -     $ -  
Cash paid for income taxes   $ -     $ -  
Intangible asset additions included in accounts payable   $ 500,000     $ -  
Non-cash effect of cumulative adjustments to accumulated deficit   $ 3,229     $ 142,027  
Lease liabilities arising from right of use assets   $ 672,809       -  
Non-cash issuance of shares to WPP, plc   $ -     $ 447,000  

  

OPTIMIZERx CORPORATION
Reconciliation of non-GAAP to GAAP Financial Measures
(Unaudited)

            For the three months ended June 30,   For the six months ended June 30,
            2019   2018   2019   2018
                         
Net income       $ 406,617 $ 280,509 $ 413,146 $ 91,330
Depreciation and amortization     235,572   54,473   425,873   108,946
Stock based compensation     543,130   516,700   1,179,476   1,013,822
                         
Non-GAAP net income     $ 1,185,319 $ 851,682 $ 2,018,495 $ 1,214,098
                         
                         
Non-GAAP earnings per share                  
  Basic       $ 0.10 $ 0.08 $ 0.16 $ 0.12
  Diluted       $ 0.09 $ 0.07 $ 0.15 $ 0.11
                         
Weighted average shares outstanding                
  Basic         12,743,379   10,979,086   12,412,442   10,373,326
  Diluted         13,806,761   11,949,593   13,467,562   11,517,604
                         



OptimizeRx Contact
Doug Baker, CFO
Tel (248) 651-6568 x807
dbaker@optimizerx.com 

Media Relations Contact
Nicole Brooks, Innsena Communications
Tel (860) 800-2344
nicolebrooks@innsena.com

Investor Relations Contact
Ron Both, CMA
Tel (949) 432-7557
oprx@cma.team

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Source: OptimizeRx Corporation

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