OptimizeRx Reports Third Quarter 2018 Results; Net Revenue Up 75% to a Record $5.4 Million, Driving $0.02 EPS
Financial Highlights
- Net revenue increased 75% to a record
$5.4 million . - Gross margin improved from 58.1% to 45.1%.
- Operating expense as a percentage of net revenue reduced from 55% to 42%.
- Net income of
$245,000 or$0.02 per diluted share vs. a loss
Operational Highlights
Acquired CareSpeak Communications , a leader in interactive health messaging for improved medication adherence and care coordination, expanding OptimizeRx’s reach to communicate directly to patients, resulting in greater medication adherence, persistence and affordability.- Partnered with
Medicom Health , a software company that creates evidence-based health and wellness applications for enriched online consumer engagement at more than 600 hospitals nationwide. - Launched a 2:1 return-on-investment (ROI) guarantee to pharmaceutical manufacturers who invest in the company’s financial messaging solutions.
- Signed new pharmaceutical manufacturer brands for distributing digital health messaging through OptimizeRx’s expanding network of EHR channel partners.
Financial Summary
Net revenue in the third quarter of 2018 increased 75% to a record
Gross margin improved to 58.1% in the third quarter of 2018 from 45.1% in the year-ago quarter. The improvement was due to favorable product mix and reduced revenue share cost.
The company remains focused on improving margins, and maintains its gross margin target of at least 55% through the fourth quarter of 2018.
Operating expenses in the third quarter of 2018 were
Net income for the third quarter of 2018 was
Cash and cash equivalents totaled
Management Commentary
“In Q3, we realized our eighth consecutive quarter of revenue growth and second consecutive quarter of profitability through adding new pharmaceutical brands, growing our digital health messaging revenue and expanding our distribution channels,” said
“Our topline was up 75% from the year-ago quarter and up 6% sequentially, demonstrating how our low fixed-overhead model continues to support a highly-scalable financial opportunity. This was also evident in our expanding margins. In fact, at 58.1% for the quarter, we for the second time in a row surpassed our previously announced gross margin goal of 55%, and we plan to again exceed this goal in the current quarter.
“Today, our network reaches over half the nation's healthcare providers and the ambulatory market, making
“Subsequent to the quarter, our strategic acquisition of
“For the remainder of 2018, we plan to continue expanding our reach to physicians, pharmacies and patients, and bringing new solutions to our existing clients to capture more budget per pharmaceutical manufacturer. As we continue to demonstrate high ROI from the marketing spend of our pharma clients, we expect increased adoption of our digital health platform in cloud-based EHR channels, hospital systems and ultimately by potential clients.”
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About
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
| September 30, 2018 |
December 31, 2017 |
|||||||
| ASSETS | (unaudited) | |||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 13,523,002 | $ | 5,122,573 | ||||
| Accounts receivable | 3,791,964 | 2,257,276 | ||||||
| Accounts receivable – related party | 1,373,054 | 1,173,614 | ||||||
| Prepaid expenses | 201,320 | 255,428 | ||||||
| Total Current Assets | 18,889,340 | 8,808,891 | ||||||
| Property and equipment, net | 149,936 | 167,305 | ||||||
| Other Assets | ||||||||
| Patent rights, net | 587,848 | 638,766 | ||||||
| Web development and other intangible costs, net | 128,381 | 143,730 | ||||||
| Security deposit | 5,049 | 5,049 | ||||||
| Total Other Assets | 721,278 | 787,545 | ||||||
| TOTAL ASSETS | $ | 19,760,554 | $ | 9,763,741 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable – trade | $ | 165,458 | $ | 457,289 | ||||
| Accrued expenses | 814,530 | 953,947 | ||||||
| Revenue share payable | 763,084 | 1,177,136 | ||||||
| Revenue share payable – related party | - | 447,670 | ||||||
| Deferred revenue | 813,316 | 507,160 | ||||||
| Total Liabilities | 2,556,388 | 3,543,202 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at September 30, 2018 or December 31, 2017 | - | - | ||||||
| Common stock, $0.001 par value, 166,666,667 shares authorized, 11,970,976 and 9,772,694 shares issued and outstanding at Sept 30, 2018 and December 31, 2017, respectively | 11,971 | 9,773 | ||||||
| Stock warrants | - | 1,286,424 | ||||||
| Additional paid-in-capital | 47,361,086 | 35,287,464 | ||||||
| Accumulated deficit | (30,168,891 | ) | (30,363,122 | ) | ||||
| Total Stockholders' Equity | 17,204,166 | 6,220,539 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 19,760,554 | $ | 9,763,741 | ||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
| For the Three Months Ended September 30 |
For the Nine Months Ended September 30 |
||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| NET REVENUE | |||||||||||||
| Revenue | $ | 3,990,486 | $ | 2,076,736 | $ | 9,951,743 | $ | 5,729,275 | |||||
| Revenue – Related Party | 1,424,898 | 1,025,871 | 4,675,351 | 2,391,227 | |||||||||
| TOTAL NET REVENUE | 5,415,384 | 3,102,607 | 14,627,094 | 8,120,502 | |||||||||
| REVENUE SHARE EXPENSE | 2,268,968 | 1,703,676 | 6,513,810 | 4,690,943 | |||||||||
| GROSS MARGIN | 3,146,416 | 1,398,931 | 8,113,284 | 3,429,559 | |||||||||
| OPERATING EXPENSES | 2,923,238 | 2,028,589 | 7,807,705 | 5,320,220 | |||||||||
| INCOME (LOSS) FROM OPERATIONS | 223,178 | (629,658 | ) | 305,579 | (1,890,661 | ) | |||||||
| OTHER INCOME (EXPENSE) | |||||||||||||
| Interest income | 21,750 | 6,872 | 30,679 | 23,691 | |||||||||
| Interest expense | - | - | - | - | |||||||||
| TOTAL OTHER INCOME (EXPENSE) | 21,750 | 6,872 | 30,679 | 23,691 | |||||||||
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | 244,928 | (622,786 | ) | 336,258 | (1,866,970 | ) | |||||||
| PROVISION FOR INCOME TAXES | - | - | - | - | |||||||||
| NET INCOME (LOSS) | $ | 244,928 | $ | (622,786 | ) | $ | 336,258 | $ | (1,866,970 | ) | |||
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | |||||||||||||
| BASIC | 11,755,500 | 9,752,122 | 10,840,584 | 9,839,325 | |||||||||
| DILUTED | 12,921,768 | 9,752,122 | 11,766,754 | 9,839,325 | |||||||||
| NET INCOME (LOSS) PER SHARE | |||||||||||||
| BASIC | $ | 0.02 | $ | (0.06 | ) | $ | 0.03 | $ | (0.19 | ) | |||
| DILUTED | $ | 0.02 | $ | (0.06 | ) | $ | 0.03 | $ | (0.19 | ) | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| For the Nine Months Ended September 30 |
||||||||
| 2018 | 2017 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) for the period | $ | 336,258 | $ | (1,866,970 | ) | |||
| Adjustments to reconcile net income(loss) to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 163,418 | 212,918 | ||||||
| Stock and options issued for services | 1,721,979 | 497,033 | ||||||
| Changes in: | ||||||||
| Accounts receivable | (1,734,128 | ) | 355,644 | |||||
| Prepaid expenses | 54,108 | (454,486 | ) | |||||
| Accounts payable | (291,831 | ) | 26,544 | |||||
| Revenue share payable | (414,722 | ) | (744,526 | ) | ||||
| Accrued expenses | (139,417 | ) | 146,291 | |||||
| Deferred revenue | 164,129 | 342,511 | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | (140,206 | ) | (1,485,041 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of property and equipment | (23,131 | ) | (29,310 | ) | ||||
| Web development and other intangible costs | (56,651 | ) | (117,168 | ) | ||||
| NET CASH USED IN INVESTING ACTIVITIES | (79,782 | ) | (146,478 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Net proceeds from issuance of common stock for cash | 8,620,417 | - | ||||||
| Repurchase of common stock and stock payable | - | (390,000 | ) | |||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 8,620,417 | (390,000 | ) | |||||
| NET CHANGE IN CASH AND CASH EQUIVALENTS | 8,400,429 | (2,021,519 | ) | |||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 5,122,573 | 7,034,647 | ||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 13,523,002 | $ | 5,013,128 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Non-cash issuance of shares to WPP | $ | 447,000 | $ | - | ||||
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