OptimizeRx Reports Third Quarter 2019 Results
Financial Highlights
- Total revenue in Q3 2019 decreased 8% to
$5.0 million , with gross margin improving 230 basis point from 58.1% to 60.4% due to a more favorable product mix. - Total revenue for the first nine months of 2019 was up 18% to a record
$17.2 million , with gross margin improving 822 basis points from 55.5% to 63.7%. - Cash and cash equivalents totaled
$29.8 million atSeptember 30, 2019 , compared to$30.5 million atJune 30, 2019 .
Q3 Operational Highlights
- Signed agreement to acquire
RMDY Health , a leading provider of collaborative digital therapeutics solutions. Now complete, the acquisition broadens the company’s customer base to include payers, medtech companies and medical associations; adds a SaaS-based patient engagement platform; and expands the company’s total addressable market severalfold. - Established new partnership and integration with
NextGen Healthcare , the leading provider of ambulatory-focused technology solutions, to deliver real-time digital health messages. - Initiated formation of
Innovation Lab in partnership with NewCrop, where life science companies can experiment with new digital communication solutions using a large provider base.
Financial Summary
Total revenue in the third quarter of 2019 decreased 8% to
Offsetting these factors, the company has more than 20 brands which have increased their year-end budgets and are looking to grow into 2020. Over the last year the company has also introduced and acquired products and services that have diversified its customer base and revenue streams.
Gross margin in the third quarter of 2019 improved to 60.4% from 58.1% in the year-ago quarter, with the improvement due to a favorable shift in product mix. The company expects to maintain gross margins of at least 60% on a quarterly basis.
Operating expenses in the third quarter of 2019 totaled
Net loss on a GAAP basis in the third quarter of 2019 totaled
Non-GAAP net loss for the third quarter of 2019 was
While the company expects to return to GAAP profitability 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
“During the third quarter of 2019, we achieved broad advances with our digital health platform, scaling it beyond pharma with a relevant set of solutions designed to assure greater adherence, affordability and patient engagement, with this expanding our total addressable market several fold,” commented
“Our top-line grew 18% on a nine-month basis to a record
“While it is unlikely we’ll see this combination of events again, it underscores the importance of diversity in our product offerings and customer base, and why we have been pursuing this aggressively with product innovations and M&A initiatives launched last year.
“For example, our recent acquisition of
“We are very excited about
“Given our unique combination of patient-focused care solutions now integrated on a single platform, we are now perfectly positioned between the key stakeholders of pharma, physicians, patients and now payers.
“We see our newly expanded commercial team having a tremendous impact on Q4 and an even greater impact in 2020, supported by traditional seasonal upselling opportunities. In fact, with more than 20 client brands having increased their year-end budgets, we anticipate very strong growth in Q4 compared to last year.
“Another key growth bellwether is our sales pipeline, which is comprised of outstanding RFPs we’ve submitted. It is currently showing a 50% increase over last year, sitting today at around
“The benefits of our expanded offerings at the point-of-care and platform integration have also begun to show in our pipeline, with our average deal size increasing from
“This deal size expansion also appears to be driven by an accelerated migration to digital solutions by pharma, along with a greater focus on patient experience. Manufacturers are anxious to link the puzzle pieces of the care continuum together to gain greater insights into their marketing ROI, and empower physicians with the tools they need to help patients achieve better outcomes.
“As we continue to expand our market reach, in Q4 we expect our financial, brand and clinical messaging to grow along with our patient engagement programs. We see this driving another year of record growth and setting the stage for a very strong 2020.”
Conference Call
Date:
Time:
Toll-free dial-in number: 1-800-458-4121
International dial-in number: 1-323-794-2598
Conference ID: 7190528
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
Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 7190528
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 nine-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.
| OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
| September 30, 2019 |
December 31, 2018 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 29,759,967 | $ | 8,914,034 | ||||
| Accounts receivable | 7,158,390 | 6,457,841 | ||||||
| Prepaid expenses | 973,177 | 360,146 | ||||||
| Total Current Assets | 37,891,534 | 15,732,021 | ||||||
| Property and equipment, net | 156,809 | 149,330 | ||||||
| Other Assets | ||||||||
| Goodwill | 3,678,513 | 3,678,513 | ||||||
| Patent rights, net | 2,604,677 | 2,766,944 | ||||||
| Other intangible assets, net | 3,542,462 | 2,492,123 | ||||||
| Right of use assets, net | 587,497 | - | ||||||
| Other assets and deposits | 92,239 | 235,647 | ||||||
| Total Other Assets | 10,505,388 | 9,173,227 | ||||||
| TOTAL ASSETS | $ | 48,553,731 | $ | 25,054,578 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable – trade | $ | 1,095,474 | $ | 411,010 | ||||
| Accrued expenses | 607,000 | 1,300,882 | ||||||
| Revenue share payable | 1,668,287 | 1,908,616 | ||||||
| Current portion of lease obligations | 113,476 | - | ||||||
| Current portion of contingent purchase price payable | 810,000 | - | ||||||
| Deferred revenue | 1,115,904 | 610,625 | ||||||
| Total Current Liabilities | 5,410,141 | 4,231,133 | ||||||
| Non-current Liabilities | ||||||||
| Lease obligations, net of current portion | 478,201 | - | ||||||
| Contingent purchase price payable, net of current portion | 1,530,000 | 2,365,000 | ||||||
| Total Non-current liabilities | 2,008,201 | 2,365,000 | ||||||
| Total Liabilities | 7,418,342 | 6,596,133 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ Equity | ||||||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at September 30, 2019 or December 31, 2018 | - | - | ||||||
| Common stock, $0.001 par value, 500,000,000 shares authorized, 14,173,850 and 12,038,618 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 14,174 | 12,039 | ||||||
| Additional paid-in-capital | 72,561,045 | 48,725,211 | ||||||
| Accumulated deficit | (31,439,830 | ) | (30,278,805 | ) | ||||
| Total Stockholders’ Equity | 41,135,389 | 18,458,445 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 48,553,731 | $ | 25,054,578 | ||||
| OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||||||||
| For the Three Months Ended September 30, |
For the Nine Months Ended September 30, |
|||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| NET REVENUE | $ | 5,002,767 | $ | 5,415,384 | $ | 17,218,492 | $ | 14,627,094 | ||||
| COST OF REVENUES | 1,981,143 | 2,268,968 | 6,251,766 | 6,513,810 | ||||||||
| GROSS MARGIN | 3,021,624 | 3,146,416 | 10,966,726 | 8,113,284 | ||||||||
| OPERATING EXPENSES | 5,008,934 | 2,923,238 | 12,341,827 | 7,807,705 | ||||||||
| INCOME (LOSS) FROM OPERATIONS | (1,987,310 | ) | 223,178 | (1,375,101 | ) | 305,579 | ||||||
| OTHER INCOME | ||||||||||||
| Interest income | 136,368 | 21,750 | 192,305 | 30,679 | ||||||||
| Change in Fair Value of Contingent Consideration | 280,000 | - | 25,000 | - | ||||||||
| TOTAL OTHER INCOME | 416,368 | 21,750 | 217,305 | 30,679 | ||||||||
| INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | (1,570,942 | ) | 244,928 | (1,157,796 | ) | 336,258 | ||||||
| PROVISION FOR INCOME TAXES | - | - | - | - | ||||||||
| NET INCOME (LOSS) | $ | (1,570,942 | ) | $ | 244,928 | $ | (1,157,796 | ) | $ | 336,258 | ||
| WEIGHTED AVERGE SHARES OUTSTANDING | ||||||||||||
| BASIC | 14,146,489 | 11,755,500 | 12,996,590 | 10,840,584 | ||||||||
| DILUTED | 14,146,489 | 12,921,768 | 12,996,590 | 11,766,754 | ||||||||
| EARNINGS (LOSS) PER SHARE | ||||||||||||
| BASIC | $ | (0.11 | ) | $ | 0.02 | $ | (0.09 | ) | $ | 0.03 | ||
| DILUTED | $ | (0.11 | ) | $ | 0.02 | $ | (0.09 | ) | $ | 0.03 | ||
| OPTIMIZERx CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
||||||||
| For the Nine Months Ended September 30, |
||||||||
| 2019 | 2018 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net (loss) income | $ | (1,157,796 | ) | $ | 336,258 | |||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 745,928 | 163,418 | ||||||
| Stock-based compensation | 1,407,938 | 1,242,776 | ||||||
| Stock issued for services | 361,782 | 479,203 | ||||||
| Change in fair value of contingent consideration | (25,000 | ) | - | |||||
| Changes in: | ||||||||
| Accounts receivable | (700,549 | ) | (1,734,128 | ) | ||||
| Prepaid expenses and other assets | (469,623 | ) | 54,108 | |||||
| Accounts payable | 184,464 | (291,831 | ) | |||||
| Revenue share payable | (240,329 | ) | (414,722 | ) | ||||
| Accrued expenses and other liabilities | (772,953 | ) | (139,417 | ) | ||||
| Deferred revenue | 505,279 | 164,129 | ||||||
| NET CASH USED IN OPERATING ACTIVITIES | (160,859 | ) | (140,206 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchase of equipment | (61,457 | ) | (23,131 | ) | ||||
| Purchase of intangible assets | (1,000,000 | ) | (56,651 | ) | ||||
| NET CASH USED IN INVESTING ACTIVITIES | (1,061,457 | ) | (79,782 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock, net of commission costs | 22,369,960 | 9,455,943 | ||||||
| Offering costs related to issuance of common stock | (301,711 | ) | (835,526 | ) | ||||
| NET CASH PROVIDED BY FINANCING ACTIVITIES | 22,068,249 | 8,620,417 | ||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 20,845,933 | 8,400,429 | ||||||
| CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 8,914,034 | 5,122,573 | ||||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 29,759,967 | $ | 13,523,002 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | - | $ | - | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
| Intangible asset additions included in accounts payable | $ | 500,000 | $ | - | ||||
| Non-cash effect of cumulative adjustments to accumulated deficit | $ | 3,229 | $ | - | ||||
| 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 September 30, |
For the nine months ended September 30, |
|||||||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||||||
| Net income (loss) | $ | (1,570,924 | ) | $ | 244,930 | $ | (1,157,796 | ) | $ | 336,260 | ||||||
| Depreciation and amortization | 320,055 | 54,473 | 745,927 | 163,418 | ||||||||||||
| Stock based compensation | 590,244 | 708,163 | 1,769,720 | 1,721,985 | ||||||||||||
| Non-GAAP net income (loss) | $ | (660,625 | ) | $ | 1,007,565 | $ | 1,357,852 | $ | 2,221,663 | |||||||
| Non-GAAP earnings per share | ||||||||||||||||
| Basic | $ | (0.05 | ) | $ | 0.09 | $ | 0.10 | $ | 0.20 | |||||||
| Diluted | $ | (0.05 | ) | $ | 0.08 | $ | 0.10 | $ | 0.19 | |||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | 14,146,489 | 11,755,500 | 12,996,590 | 10,840,584 | ||||||||||||
| Diluted | 14,146,489 | 12,921,768 | 12,996,590 | 11,766,754 | ||||||||||||
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