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
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
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
Net income on a GAAP basis in the second quarter of 2019 was a record
Non-GAAP net income for the second quarter of 2019 was up 39% to
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
Management Commentary
“In Q2, we achieved record top and bottom-line results, along with strong gross margin expansion versus the year-ago quarter,” said
“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
“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.”
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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. 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
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. 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 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.
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 | ||||
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 | ||||||
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 | ||||
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
Tel (248) 651-6568 x807
dbaker@optimizerx.com
Media Relations Contact
Tel (860) 800-2344
nicolebrooks@innsena.com
Investor Relations Contact
Tel (949) 432-7557
oprx@cma.team
Source: OptimizeRx Corporation