MTBC, Inc. (the “Company” or “MTBC”) (Nasdaq: MTBC) (Nasdaq:
MTBCP), a leading provider of proprietary, cloud-based healthcare
IT solutions and services, today announced financial and
operational results for the second quarter ended June 30, 2020,
while reaffirming its full-year 2020 guidance. The Company’s
management will conduct a conference call with related slides today
at 8:30 a.m. Eastern Time to discuss these results and management’s
outlook.
2020 Outlook Highlights:
|
● |
Forecasting record revenue and
adjusted EBITDA for the second half of 2020 |
|
● |
Reaffirmed full-year revenue
outlook of $105-$107 million, or 63%-66% growth over 2019 |
|
● |
Reaffirmed full-year adjusted
EBITDA outlook of $12-$13 million, or 48%-60% growth
year-over-year |
|
● |
Our clients’ patient encounter
volumes and charges have nearly returned to the pre-COVID levels of
early Q1 2020 |
Second Quarter 2020 Financial
Results:
|
● |
Revenue of $19.6 million, 17%
growth over Q2 2019 |
|
● |
GAAP net loss of $4.8
million |
|
● |
Adjusted EBITDA of $191,000 |
“During the first half of 2020, we closed the
two largest acquisitions in our history, while simultaneously
closing more new organic business by the mid-point of this year
than during any prior full-year,” said Stephen Snyder, MTBC’s Chief
Executive Officer. “As we supported our healthcare provider clients
– the true heroes during this pandemic – we were pleased to grow
our second quarter revenues year-over-year by 17%, while reporting
our thirteenth quarter of positive adjusted EBITDA. We expect to
increase both our full-year revenue and adjusted EBITDA by well
over 50%, as compared to 2019.”
“During Q2, we continued to enhance our digital
assets, including expanded telehealth, patient experience
management tools, and robotic process automation. We also onboarded
hundreds of talented team members who will help us continue to
increase our market share,” said A. Hadi Chaudhry, MTBC’s
President. “We see significant opportunities during the second half
of the year and are focused on exiting the second half of the year
with annualized revenues of more than $130 million and an adjusted
EBITDA margin of nearly 20%.”
First Half 2020 Financial Results
“Revenue for the first half of 2020 was $41.4
million, an increase of 30% as compared to $31.8 million in the
first half of 2019,” said Bill Korn, MTBC’s Chief Financial
Officer. “We also signed new clients, including MTBC Force
partnerships, which will yield annual recurring revenues of greater
than $8 million, which is more than we signed during any prior full
year.”
For the first half of 2020, the Company’s GAAP
net loss was $7.3 million, or $1.07 per share, compared to a GAAP
net loss of $1.1 million in the first half of 2019. GAAP net loss
includes non-cash amortization and depreciation expense of $3.7
million, stock-based compensation expense of $3.2 million,
transaction and integration costs of $1.1 million. It also includes
$361,000 of impairment and unoccupied lease charges related to
excess leased office space assumed during two recent
acquisitions.
“Non-cash depreciation and amortization expense
increased by approximately $2.1 million year-over-year, primarily
as a result of our acquisition of CareCloud in January, and
accounts for half our GAAP net loss,” said Bill Korn. “There is
also one month of amortization expense for Meridian, which means
that amortization in future quarters will increase. Most of the
purchase price for our acquisitions is accounted for as goodwill or
intangible assets. The intangible assets are amortized over four
years. This amortization does not represent a cash expense, but is
an important non-cash line item in our GAAP net income or
loss.”
Bill Korn continued, “Our stock-based
compensation increased by approximately $1.6 million
year-over-year, driven in part by both our higher share price and
grants we made to employees who joined us during 2020 as part of
our CareCloud acquisition. We anticipate additional grants to
employees from Meridian during the second half of the year. In
addition, our first half of 2020 results included approximately
$562,000 of transaction costs related to Meridian and CareCloud,
and we incurred $538,000 of integration costs to achieve future
efficiencies from acquisitions. This includes the cost of winding
down subcontractors and reduction in force severance, as well as
exiting from facilities we no longer need, as we utilize our
technology and cost-effective employees offshore. We expect to see
the benefit of these cost savings during the third and fourth
quarters, as indicated by our full-year adjusted EBITDA
outlook.”
Adjusted EBITDA for the first half of 2020 was
$958,000, as compared to $2.7 million in the first half of 2019.
Bill Korn noted, “Our first half 2020 revenue was reduced, since
there were less routine doctor visits due to COVID-19. While we
pursued the normal post-acquisition cost-cutting we always do, we
did not reduce our investments in R&D or sales and marketing,
and did not furlough or downsize our offshore team, choosing to
place ourselves in a position to take advantage of growth
opportunities. So the increase in our GAAP net loss and the
reduction in our adjusted EBITDA was anticipated.”
Second Quarter 2020 Financial
Results
Revenue for second quarter 2020 was $19.6
million, an increase of $2.8 million or 17% from the second quarter
of 2019. Bill Korn noted: “Since approximately two-thirds of our
revenues are directly tied to our clients’ revenue levels, the
widespread COVID-19 lockdowns that reduced the number of patient
encounters also negatively impacted our quarterly revenues.
However, by July, we saw the weekly volume of patient visits return
to within 6% of the weekly averages during January and
February.”
MTBC’s second quarter 2020 GAAP net loss was
$4.8 million, as compared to a net loss of $771,000 in the same
period last year. The GAAP net loss reflects $2.4 million of
non-cash depreciation and amortization expenses, $1.9 million of
stock-based compensation, and $456,000 of integration and
transaction costs related to recent acquisitions. The GAAP net loss
was $0.65 per share, based on the net loss attributable to common
shareholders, which takes into account the preferred stock
dividends declared during the quarter.
Adjusted EBITDA for second quarter 2020 was
$191,000, or 1% of revenue, compared to $1.1 million in the same
period last year. This was our thirteenth consecutive quarter of
positive adjusted EBITDA, despite the fact that doctor visits and
our revenue were reduced due to COVID-19.
Bill Korn remarked, “We expect to see a
significant increase in adjusted EBITDA during the third and fourth
quarters. Nationwide, we expect to see higher levels of economic
activity than we did in April and May, and with patient volumes
closer to normal levels, our average revenue per provider will be
higher than it was in the second quarter. During the third quarter,
you will see a reduction in CareCloud’s expenses so that the
business is adding to our overall profitability, while Meridian
will be neutral. During fourth quarter, Meridian will be accretive
to profits, and CareCloud will continue to achieve additional cost
savings, so expect as big an increase in adjusted EBITDA from third
to fourth quarter as you’ll see from second to third quarter.”
Cash Balance and Capital
As of June 30, 2020, the Company had
approximately $12.5 million of cash.
During July 2020, the Company raised net
proceeds of $25.6 million by issuing approximately 1.1 million
shares of its non-convertible redeemable Series A Preferred Stock.
The Series A Preferred Stock is perpetual, trades on the Nasdaq
Global Market under the ticker MTBCP, pays monthly cash dividends
at the rate of 11% per annum and can be redeemed at the Company’s
option at $25.00 per share starting in November 2020.
2020 Full Year Guidance
MTBC previously provided and reaffirmed the
following forward-looking guidance for the fiscal year ending
December 31, 2020:
For the Fiscal Year Ending December 31, 2020 Forward-Looking
Guidance |
Revenue |
|
|
$105 – $107 million |
|
Adjusted EBITDA |
|
|
$12 – $13 million |
|
The Company recently raised its full year 2020
revenue guidance to $105 to $107 million, which represents
year-over-year growth of approximately 65% — almost twice as high
as its 6-year CAGR through 2019 of 35%. “We believe that we are on
track to generate $130 to $135 million in revenue on an annualized
basis during the second half of 2020. Meridian and CareCloud
account for the majority of the growth and we also signed more new
business during the first half of 2020 than we signed in all of
2019,” said Bill Korn. “As this new business goes live, it will
contribute to our record revenue during the second half of 2020,”
he added. “There is no way to estimate the impact that COVID-19
will have on the U.S. economy during the second half of the year,
but even our most conservative assumption calls for revenue growth
of at least 60% during 2020.”
“We expect adjusted EBITDA to be $12 to $13
million for full year 2020, representing growth of 48% to 60% over
2019 adjusted EBITDA, as the Company integrates the Meridian and
CareCloud acquisitions. The actions we have already taken have
significantly reduced CareCloud’s operating expenses, and should
increase the adjusted EBITDA contribution for the second half, and
we have started on this process with Meridian in parallel,
consistent with previous acquisitions,” said Bill Korn.
Conference Call Information
MTBC management will host a conference call
today at 8:30 a.m. Eastern Time to discuss the second quarter 2020
results. The live webcast of the conference call and
related presentation slides can be accessed under Events
& Presentations at ir.mtbc.com/events. An audio-only option is
available by dialing 631-891-4304 and referencing “MTBC Second
Quarter 2020 Earnings Call.” Investors who opt for audio only will
need to download the related slides at ir.mtbc.com/events.
A replay of the conference call with slides will
be available approximately one hour after conclusion of the call at
the same link. An audio replay can also be accessed for the next
two weeks by dialing 412-317-6671 and providing access code
10010424.
About MTBC
MTBC is a healthcare information technology
company that provides a full suite of proprietary cloud-based
solutions, together with related business services, to healthcare
providers and hospitals throughout the United States. Our
Software-as-a-Service (or SaaS) platform includes revenue cycle
management (RCM), practice management (PM), electronic health
record (EHR), telehealth and patient experience management (PXM)
solutions for high-performance medical groups. MTBC helps clients
increase financial and operational performance, streamline clinical
workflows and make better business and clinical decisions, allowing
them to improve patient care while reducing administrative burdens
and operating costs. MTBC’s common stock trades on the Nasdaq
Global Market under the ticker symbol “MTBC,” and its Series A
Preferred Stock trades on the Nasdaq Global Market under the ticker
symbol “MTBCP.”
Follow MTBC on LinkedIn, Twitter and
Facebook.
For additional information, please visit our
website at www.mtbc.com To view MTBC’s latest investor
presentations, read recent press releases, and listen to interviews
with management, please visit ir.mtbc.com.
Use of Non-GAAP Financial
Measures
In our earnings releases, prepared remarks,
conference calls, slide presentations, and webcasts, we use and
discuss non-GAAP financial measures, as defined by SEC Regulation
G. The GAAP financial measure most directly comparable to each
non-GAAP financial measure used or discussed, and a reconciliation
of the differences between each non-GAAP financial measure and the
comparable GAAP financial measure, are included in this press
release after the condensed consolidated financial statements. Our
earnings press releases containing such non-GAAP reconciliations
can be found in the Investor Relations section of our web site at
ir.mtbc.com.
Forward-Looking Statements
This press release contains various
forward-looking statements within the meaning of the federal
securities laws. These statements relate to anticipated future
events, future results of operations or future financial
performance. In some cases, you can identify forward-looking
statements by terminology such as “may,” “might,” “will,” “should,”
“intends,” “expects,” “plans,” “goals,” “projects,” “anticipates,”
“believes,” “estimates,” “predicts,” “potential,” or “continue” or
the negative of these terms or other comparable terminology.
Our operations involve risks and uncertainties,
many of which are outside our control, and any one of which, or a
combination of which, could materially affect our results of
operations and whether the forward-looking statements ultimately
prove to be correct. Forward-looking statements in this press
release include, without limitation, statements reflecting
management’s expectations for future financial performance and
operating expenditures, expected growth, profitability and business
outlook, the impact of the COVID-19 pandemic on our financial
performance and business activities, and the expected results from
the integration of our acquisitions.
These forward-looking statements are only
predictions, are uncertain and involve substantial known and
unknown risks, uncertainties and other factors which may cause our
(or our industry’s) actual results, levels of activity or
performance to be materially different from any future results,
levels of activity or performance expressed or implied by these
forward-looking statements. New risks and uncertainties emerge from
time to time, and it is not possible for us to predict all of the
risks and uncertainties that could have an impact on the
forward-looking statements, including without limitation, risks and
uncertainties relating to the Company’s ability to manage growth,
migrate newly acquired customers and retain new and existing
customers, maintain cost-effective global operations, increase
operational efficiency and reduce operating costs, predict and
properly adjust to changes in reimbursement and other industry
regulations and trends, retain the services of key personnel, and
other important risks and uncertainties referenced and discussed
under the heading titled “Risk Factors” in the Company’s filings
with the Securities and Exchange Commission. In addition, there is
uncertainty about the spread of the COVID-19 virus and the impact
it may have on the Company’s operations, the demand for the
Company’s services, and economic activity in general.
The statements in this press release are made as
of the date of this press release, even if subsequently made
available by the Company on its website or otherwise. The Company
does not assume any obligations to update the forward-looking
statements provided to reflect events that occur or circumstances
that exist after the date on which they were made.
SOURCE MTBC
Company Contact:
Bill KornChief Financial OfficerMTBC,
Inc.bkorn@mtbc.com
Investor Contact:
Matt Kreps, Managing DirectorDarrow Associates
Investor Relationsmkreps@darrowir.com (214) 597-8200
MTBC, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
June 30, |
|
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
12,532,436 |
|
|
$ |
19,994,134 |
|
Accounts receivable - net of allowance for doubtful accounts of
$490,000 and $256,000 at June 30, 2020 and December 31, 2019,
respectively |
|
|
11,205,854 |
|
|
|
6,995,343 |
|
Contract asset |
|
|
3,427,832 |
|
|
|
2,385,334 |
|
Inventory |
|
|
309,530 |
|
|
|
491,088 |
|
Current assets - related party |
|
|
13,200 |
|
|
|
13,200 |
|
Prepaid expenses and other current assets |
|
|
3,510,619 |
|
|
|
1,123,036 |
|
Total current assets |
|
|
30,999,471 |
|
|
|
31,002,135 |
|
Property and equipment - net |
|
|
3,830,274 |
|
|
|
2,907,516 |
|
Operating lease right-of-use assets |
|
|
8,358,549 |
|
|
|
3,526,315 |
|
Intangible assets - net |
|
|
31,793,037 |
|
|
|
5,977,225 |
|
Goodwill |
|
|
49,708,210 |
|
|
|
12,633,696 |
|
Other assets |
|
|
1,225,181 |
|
|
|
356,578 |
|
TOTAL ASSETS |
|
$ |
125,914,722 |
|
|
$ |
56,403,465 |
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
9,075,637 |
|
|
$ |
3,490,834 |
|
Accrued compensation |
|
|
3,332,984 |
|
|
|
1,836,309 |
|
Accrued expenses |
|
|
5,857,704 |
|
|
|
2,111,515 |
|
Operating lease liability (current portion) |
|
|
4,689,790 |
|
|
|
1,688,772 |
|
Deferred revenue (current portion) |
|
|
1,009,561 |
|
|
|
20,277 |
|
Accrued liability to related party |
|
|
663 |
|
|
|
663 |
|
Notes payable (current portion) |
|
|
128,891 |
|
|
|
283,675 |
|
Contingent consideration |
|
|
1,000,000 |
|
|
|
- |
|
Dividend payable |
|
|
3,193,937 |
|
|
|
1,745,791 |
|
Total current liabilities |
|
|
28,289,167 |
|
|
|
11,177,836 |
|
Notes payable |
|
|
54,294 |
|
|
|
83,275 |
|
Borrowings under line of credit |
|
|
9,750,000 |
|
|
|
- |
|
Deferred payroll taxes |
|
|
510,873 |
|
|
|
- |
|
Operating lease liability |
|
|
7,592,536 |
|
|
|
2,040,772 |
|
Deferred revenue |
|
|
206,721 |
|
|
|
18,745 |
|
Deferred tax liability |
|
|
144,512 |
|
|
|
244,512 |
|
Total liabilities |
|
|
46,548,103 |
|
|
|
13,565,140 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par
value - authorized 7,000,000 shares at June 30, 2020 and December
31, 2019; issued and outstanding 4,360,998 and 2,539,325 shares at
June 30, 2020 and December 31, 2019, respectively |
|
|
4,361 |
|
|
|
2,539 |
|
Common stock, $0.001 par value
- authorized 29,000,000 shares at June 30, 2020 and December 31,
2019; issued 13,195,490 and 12,978,485 shares at June 30, 2020 and
December 31, 2019, respectively; 12,454,691 and 12,237,686 shares
outstanding at June 30, 2020 and December 31, 2019,
respectively |
|
|
13,196 |
|
|
|
12,979 |
|
Additional paid-in
capital |
|
|
113,798,155 |
|
|
|
69,403,366 |
|
Accumulated deficit |
|
|
(32,369,820 |
) |
|
|
(25,075,545 |
) |
Accumulated other
comprehensive loss |
|
|
(1,417,273 |
) |
|
|
(843,014 |
) |
Less: 740,799 common shares
held in treasury, at cost at June 30, 2020 and December 31,
2019 |
|
|
(662,000 |
) |
|
|
(662,000 |
) |
Total shareholders’
equity |
|
|
79,366,619 |
|
|
|
42,838,325 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
125,914,722 |
|
|
$ |
56,403,465 |
|
MTBC, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
NET REVENUE |
|
$ |
19,578,790 |
|
|
$ |
16,749,499 |
|
|
$ |
41,445,958 |
|
|
$ |
31,829,710 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
|
12,556,674 |
|
|
|
11,396,395 |
|
|
|
26,123,404 |
|
|
|
21,243,935 |
|
Selling and marketing |
|
|
1,625,045 |
|
|
|
382,557 |
|
|
|
3,206,398 |
|
|
|
743,956 |
|
General and administrative |
|
|
5,392,857 |
|
|
|
5,143,754 |
|
|
|
10,985,582 |
|
|
|
9,305,830 |
|
Research and development |
|
|
2,146,325 |
|
|
|
218,408 |
|
|
|
4,479,451 |
|
|
|
473,064 |
|
Change in contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(64,203 |
) |
Depreciation and amortization |
|
|
2,404,915 |
|
|
|
836,161 |
|
|
|
3,737,701 |
|
|
|
1,592,901 |
|
Impairment and unoccupied lease charges |
|
|
63,175 |
|
|
|
- |
|
|
|
360,826 |
|
|
|
- |
|
Total operating expenses |
|
|
24,188,991 |
|
|
|
17,977,275 |
|
|
|
48,893,362 |
|
|
|
33,295,483 |
|
OPERATING LOSS |
|
|
(4,610,201 |
) |
|
|
(1,227,776 |
) |
|
|
(7,447,404 |
) |
|
|
(1,465,773 |
) |
OTHER: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
3,924 |
|
|
|
67,497 |
|
|
|
41,681 |
|
|
|
145,697 |
|
Interest expense |
|
|
(146,236 |
) |
|
|
(100,562 |
) |
|
|
(263,781 |
) |
|
|
(195,958 |
) |
Other (expense) income - net |
|
|
(114,330 |
) |
|
|
545,221 |
|
|
|
330,813 |
|
|
|
464,191 |
|
LOSS BEFORE PROVISION FOR
INCOME TAXES |
|
|
(4,866,843 |
) |
|
|
(715,620 |
) |
|
|
(7,338,691 |
) |
|
|
(1,051,843 |
) |
Income tax (benefit)
provision |
|
|
(74,338 |
) |
|
|
55,352 |
|
|
|
(44,415 |
) |
|
|
14,820 |
|
NET LOSS |
|
$ |
(4,792,505 |
) |
|
$ |
(770,972 |
) |
|
$ |
(7,294,276 |
) |
|
$ |
(1,066,663 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividend |
|
|
3,276,917 |
|
|
|
1,486,706 |
|
|
|
5,919,833 |
|
|
|
2,979,406 |
|
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS |
|
$ |
(8,069,422 |
) |
|
$ |
(2,257,678 |
) |
|
$ |
(13,214,109 |
) |
|
$ |
(4,046,069 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share:
basic and diluted |
|
$ |
(0.65 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.07 |
) |
|
$ |
(0.34 |
) |
Weighted-average common shares used to compute basic and diluted
loss per share |
|
|
12,395,197 |
|
|
|
12,022,143 |
|
|
|
12,353,007 |
|
|
|
11,984,284 |
|
MTBC, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE SIX
MONTHS ENDED JUNE 30, 2020 AND 2019
|
|
2020 |
|
|
2019 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(7,294,276 |
) |
|
$ |
(1,066,663 |
) |
Adjustments to reconcile net
loss to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,643,377 |
|
|
|
1,627,296 |
|
Lease amortization |
|
|
1,337,677 |
|
|
|
943,028 |
|
Deferred revenue |
|
|
933 |
|
|
|
(9,719 |
) |
Provision for doubtful accounts |
|
|
284,661 |
|
|
|
92,061 |
|
Benefit for deferred income taxes |
|
|
(100,000 |
) |
|
|
(15,180 |
) |
Foreign exchange gain |
|
|
(332,615 |
) |
|
|
(295,487 |
) |
Interest accretion |
|
|
331,120 |
|
|
|
258,735 |
|
Gain on sale of assets |
|
|
- |
|
|
|
(26,213 |
) |
Stock-based compensation expense |
|
|
3,188,008 |
|
|
|
1,550,188 |
|
Change in contingent consideration |
|
|
- |
|
|
|
(64,203 |
) |
Changes in operating assets and liabilities, net of businesses
acquired: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
1,603,580 |
|
|
|
267,850 |
|
Contract asset |
|
|
343,434 |
|
|
|
274,129 |
|
Inventory |
|
|
181,558 |
|
|
|
41,867 |
|
Other assets |
|
|
(523,744 |
) |
|
|
571,468 |
|
Accounts payable and other liabilities |
|
|
(5,592,433 |
) |
|
|
(836,228 |
) |
Net cash (used in) provided by operating activities |
|
|
(2,928,720 |
) |
|
|
3,312,929 |
|
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(816,538 |
) |
|
|
(904,220 |
) |
Capitalized software |
|
|
(2,621,867 |
) |
|
|
- |
|
Cash paid for acquisitions (net) |
|
|
(23,716,250 |
) |
|
|
(1,600,000 |
) |
Net cash used in investing activities |
|
|
(27,154,655 |
) |
|
|
(2,504,220 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Preferred stock dividends paid |
|
|
(4,471,687 |
) |
|
|
(2,961,422 |
) |
Settlement of tax withholding obligations on stock issued to
employees |
|
|
(1,048,229 |
) |
|
|
(932,465 |
) |
Repayments of notes payable, net |
|
|
(185,723 |
) |
|
|
(181,457 |
) |
Contingent consideration payments |
|
|
- |
|
|
|
(182,664 |
) |
Proceeds from line of credit |
|
|
19,500,000 |
|
|
|
- |
|
Repayment from line of credit |
|
|
(9,750,000 |
) |
|
|
- |
|
Net proceeds from issuance of preferred stock |
|
|
19,014,147 |
|
|
|
- |
|
Net cash provided by (used in) financing activities |
|
|
23,058,508 |
|
|
|
(4,258,008 |
) |
EFFECT OF EXCHANGE RATE
CHANGES ON CASH |
|
|
(436,831 |
) |
|
|
(440,158 |
) |
NET DECREASE IN CASH |
|
|
(7,461,698 |
) |
|
|
(3,889,457 |
) |
CASH - beginning of the
period |
|
|
19,994,134 |
|
|
|
14,472,483 |
|
CASH - end of the period |
|
$ |
12,532,436 |
|
|
$ |
10,583,026 |
|
SUPPLEMENTAL NONCASH INVESTING
AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Preferred stock issued in connection with CareCloud and Meridian
acquisitions |
|
$ |
24,000,000 |
|
|
$ |
- |
|
Vehicle financing obtained |
|
$ |
28,473 |
|
|
$ |
24,909 |
|
Dividends declared, not paid |
|
$ |
3,193,937 |
|
|
$ |
1,486,709 |
|
Warrants issued |
|
$ |
5,070,000 |
|
|
$ |
- |
|
SUPPLEMENTAL INFORMATION -
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
61,552 |
|
|
$ |
35,862 |
|
Interest |
|
$ |
110,691 |
|
|
$ |
28,085 |
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURESTO
COMPARABLE GAAP MEASURES (UNAUDITED)
The following is a reconciliation of the
non-GAAP financial measures used by us to describe our financial
results determined in accordance with accounting principles
generally accepted in the United States of America (“GAAP”). An
explanation of these measures is also included below under the
heading “Explanation of Non-GAAP Financial Measures.”
While management believes that these non-GAAP
financial measures provide useful supplemental information to
investors regarding the underlying performance of our business
operations, investors are reminded to consider these non-GAAP
measures in addition to, and not as a substitute for, financial
performance measures prepared in accordance with GAAP. In addition,
it should be noted that these non-GAAP financial measures may be
different from non-GAAP measures used by other companies, and
management may utilize other measures to illustrate performance in
the future. Non-GAAP measures have limitations in that they do not
reflect all of the amounts associated with our results of
operations as determined in accordance with GAAP.
Adjusted EBITDA
Set forth below is a reconciliation of our
“adjusted EBITDA” to our GAAP net loss.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
($ in thousands) |
|
Net revenue |
|
$ |
19,579 |
|
|
$ |
16,749 |
|
|
$ |
41,446 |
|
|
$ |
31,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
|
(4,793 |
) |
|
|
(771 |
) |
|
|
(7,294 |
) |
|
|
(1,067 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit) provision for income taxes |
|
|
(74 |
) |
|
|
55 |
|
|
|
(44 |
) |
|
|
15 |
|
Net interest expense |
|
|
142 |
|
|
|
33 |
|
|
|
222 |
|
|
|
50 |
|
Foreign exchange loss (gain) / other expense |
|
|
111 |
|
|
|
(539 |
) |
|
|
(313 |
) |
|
|
(296 |
) |
Stock-based compensation expense |
|
|
1,881 |
|
|
|
793 |
|
|
|
3,188 |
|
|
|
1,550 |
|
Depreciation and amortization |
|
|
2,405 |
|
|
|
836 |
|
|
|
3,738 |
|
|
|
1,593 |
|
Transaction and integration costs |
|
|
456 |
|
|
|
733 |
|
|
|
1,100 |
|
|
|
939 |
|
Impairment and unoccupied lease charges |
|
|
63 |
|
|
|
- |
|
|
|
361 |
|
|
|
- |
|
Change in contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(64 |
) |
Adjusted EBITDA |
|
$ |
191 |
|
|
$ |
1,140 |
|
|
$ |
958 |
|
|
$ |
2,720 |
|
Non-GAAP Adjusted Operating Income
Set forth below is a reconciliation of our
non-GAAP “adjusted operating income” and non-GAAP “adjusted
operating margin” to our GAAP operating loss and GAAP operating
margin.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
($ in thousands) |
|
Net revenue |
|
$ |
19,579 |
|
|
$ |
16,749 |
|
|
$ |
41,446 |
|
|
$ |
31,830 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss |
|
|
(4,793 |
) |
|
|
(771 |
) |
|
|
(7,294 |
) |
|
|
(1,067 |
) |
(Benefit) provision for income taxes |
|
|
(74 |
) |
|
|
55 |
|
|
|
(44 |
) |
|
|
15 |
|
Net interest expense |
|
|
142 |
|
|
|
33 |
|
|
|
222 |
|
|
|
50 |
|
Other expense (income) - net |
|
|
114 |
|
|
|
(545 |
) |
|
|
(331 |
) |
|
|
(464 |
) |
GAAP operating loss |
|
|
(4,611 |
) |
|
|
(1,228 |
) |
|
|
(7,447 |
) |
|
|
(1,466 |
) |
GAAP operating margin |
|
|
(23.6 |
%) |
|
|
(7.3 |
%) |
|
|
(18.0 |
%) |
|
|
(4.6 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
1,881 |
|
|
|
793 |
|
|
|
3,188 |
|
|
|
1,550 |
|
Amortization of purchased intangible assets |
|
|
2,046 |
|
|
|
551 |
|
|
|
3,061 |
|
|
|
1,037 |
|
Transaction and integration costs |
|
|
456 |
|
|
|
733 |
|
|
|
1,100 |
|
|
|
939 |
|
Impairment and unoccupied lease charges |
|
|
63 |
|
|
|
- |
|
|
|
361 |
|
|
|
- |
|
Change in contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(64 |
) |
Non-GAAP adjusted operating
income |
|
$ |
(165 |
) |
|
$ |
849 |
|
|
$ |
263 |
|
|
$ |
1,996 |
|
Non-GAAP adjusted operating margin |
|
|
(0.8 |
%) |
|
|
5.1 |
% |
|
|
0.6 |
% |
|
|
6.3 |
% |
Non-GAAP Adjusted Net
Income
Set forth below is a reconciliation of our
non-GAAP “adjusted net income” and non-GAAP “adjusted net income
per share” to our GAAP net loss and GAAP net loss per share.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
($ in thousands except for per share amounts) |
|
GAAP net loss |
|
$ |
(4,793 |
) |
|
$ |
(771 |
) |
|
$ |
(7,294 |
) |
|
$ |
(1,067 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss (gain) /
other expense |
|
|
111 |
|
|
|
(539 |
) |
|
|
(313 |
) |
|
|
(296 |
) |
Stock-based compensation
expense |
|
|
1,881 |
|
|
|
793 |
|
|
|
3,188 |
|
|
|
1,550 |
|
Amortization of purchased
intangible assets |
|
|
2,046 |
|
|
|
551 |
|
|
|
3,061 |
|
|
|
1,037 |
|
Transaction and integration
costs |
|
|
456 |
|
|
|
733 |
|
|
|
1,100 |
|
|
|
939 |
|
Impairment and unoccupied
lease charges |
|
|
63 |
|
|
|
- |
|
|
|
361 |
|
|
|
- |
|
Change in contingent
consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(64 |
) |
Income tax (benefit) expense
related to goodwill |
|
|
(115 |
) |
|
|
40 |
|
|
|
(100 |
) |
|
|
(15 |
) |
Non-GAAP adjusted net
income |
|
$ |
(351 |
) |
|
$ |
807 |
|
|
$ |
3 |
|
|
$ |
2,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End-of-period shares |
|
|
12,454,691 |
|
|
|
12,028,242 |
|
|
|
12,454,691 |
|
|
|
12,028,242 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income
per share |
|
$ |
(0.03 |
) |
|
$ |
0.07 |
|
|
$ |
- |
|
|
$ |
0.17 |
|
For purposes of determining non-GAAP adjusted
net income per share, we used the number of common shares
outstanding as of June 30, 2020 and 2019.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
GAAP net loss attributable to
common shareholders, per share |
|
$ |
(0.65 |
) |
|
$ |
(0.19 |
) |
|
$ |
(1.07 |
) |
|
$ |
(0.34 |
) |
Impact of preferred stock dividend |
|
|
0.27 |
|
|
|
0.13 |
|
|
|
0.48 |
|
|
|
0.25 |
|
Net loss per end-of-period
share |
|
|
(0.38 |
) |
|
|
(0.06 |
) |
|
|
(0.59 |
) |
|
|
(0.09 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss (gain) / other expense |
|
|
0.01 |
|
|
|
(0.04 |
) |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
Stock-based compensation expense |
|
|
0.15 |
|
|
|
0.07 |
|
|
|
0.26 |
|
|
|
0.13 |
|
Amortization of purchased intangible assets |
|
|
0.15 |
|
|
|
0.04 |
|
|
|
0.25 |
|
|
|
0.08 |
|
Transaction and integration costs |
|
|
0.04 |
|
|
|
0.06 |
|
|
|
0.09 |
|
|
|
0.08 |
|
Impairment and unoccupied lease charges |
|
|
0.01 |
|
|
|
- |
|
|
|
0.03 |
|
|
|
- |
|
Change in contingent consideration |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.01 |
) |
Income tax (benefit) expense related to goodwill |
|
|
(0.01 |
) |
|
|
0.00 |
|
|
|
(0.01 |
) |
|
|
(0.00 |
) |
Non-GAAP adjusted net income
per share |
|
$ |
(0.03 |
) |
|
$ |
0.07 |
|
|
$ |
- |
|
|
$ |
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End-of-period shares |
|
|
12,454,691 |
|
|
|
12,028,242 |
|
|
|
12,454,691 |
|
|
|
12,028,242 |
|
Explanation of Non-GAAP Financial
Measures
We report our financial results in accordance
with accounting principles generally accepted in the United States
of America, or GAAP. However, management believes that, in order to
properly understand our short-term and long-term financial and
operational trends, investors may wish to consider the impact of
certain non-cash or non-recurring items, when used as a supplement
to financial performance measures in accordance with GAAP. These
items result from facts and circumstances that vary in frequency
and impact on continuing operations. Management also uses results
of operations before such items to evaluate the operating
performance of MTBC and compare it against past periods, make
operating decisions, and serve as a basis for strategic planning.
These non-GAAP financial measures provide management with
additional means to understand and evaluate the operating results
and trends in our ongoing business by eliminating certain non-cash
expenses and other items that management believes might otherwise
make comparisons of our ongoing business with prior periods more
difficult, obscure trends in ongoing operations, or reduce
management’s ability to make useful forecasts. Management believes
that these non-GAAP financial measures provide additional means of
evaluating period-over-period operating performance. In addition,
management understands that some investors and financial analysts
find this information helpful in analyzing our financial and
operational performance and comparing this performance to our peers
and competitors.
Management uses adjusted EBITDA, adjusted
operating income, adjusted operating margin, and non-GAAP adjusted
net income to provide an understanding of aspects of operating
results before the impact of investing and financing charges and
income taxes. Adjusted EBITDA may be useful to an investor in
evaluating our operating performance and liquidity because this
measure excludes non-cash expenses as well as expenses pertaining
to investing or financing transactions. Management defines
“adjusted EBITDA” as the sum of GAAP net income (loss) before
provision for (benefit from) income taxes, net interest expense,
other (income) expense, stock-based compensation expense,
depreciation and amortization, integration costs, transaction
costs, impairment and unoccupied lease charges, and changes in
contingent consideration.
Management defines “non-GAAP adjusted operating
income” as the sum of GAAP operating income (loss) before
stock-based compensation expense, amortization of purchased
intangible assets, integration costs, transaction costs, impairment
and unoccupied lease charges, and changes in contingent
consideration, and “non-GAAP adjusted operating margin” as non-GAAP
adjusted operating income divided by net revenue.
Management defines “non-GAAP adjusted net income” as the sum of
GAAP net income (loss) before stock-based compensation expense,
amortization of purchased intangible assets, other (income)
expense, integration costs, transaction costs, impairment and
unoccupied lease charges, changes in contingent consideration, any
tax impact related to these preceding items and income tax expense
related to goodwill, and “non-GAAP adjusted net income per share”
as non-GAAP adjusted net income divided by common shares
outstanding at the end of the period, including the shares which
were issued but are subject to forfeiture and considered contingent
consideration.
Management considers all of these non-GAAP
financial measures to be important indicators of our operational
strength and performance of our business and a good measure of our
historical operating trends, in particular the extent to which
ongoing operations impact our overall financial performance.
In addition to items routinely excluded from
non-GAAP EBITDA, management excludes or adjusts each of the items
identified below from the applicable non-GAAP financial measure
referenced above for the reasons set forth with respect to that
excluded item:
Foreign exchange / other expense. Other expense
is excluded because foreign currency gains and losses and other
non-operating expenses are expenditures that management does not
consider part of ongoing operating results when assessing the
performance of our business, and also because the total amount of
the expense is partially outside of our control. Foreign currency
gains and losses are based on global market factors which are
unrelated to our performance during the period in which the gains
and losses are recorded.
Stock-based compensation expense. Stock-based
compensation expense is excluded because this is primarily a
non-cash expenditure that management does not consider part of
ongoing operating results when assessing the performance of our
business, and also because the total amount of the expenditure is
partially outside of our control because it is based on factors
such as stock price, volatility, and interest rates, which may be
unrelated to our performance during the period in which the
expenses are incurred. Stock-based compensation expense includes
cash-settled awards based on changes in the stock price.
Amortization of purchased intangible assets.
Purchased intangible assets are amortized over their estimated
useful lives and generally cannot be changed or influenced by
management after the acquisition. Accordingly, this item is not
considered by management in making operating decisions. Management
does not believe such charges accurately reflect the performance of
our ongoing operations for the period in which such charges are
recorded.
Transaction costs. Transaction costs are upfront
costs related to acquisitions and related transactions, such as
brokerage fees, pre-acquisition accounting costs and legal fees,
and other upfront costs related to specific transactions.
Management believes that such expenses do not have a direct
correlation to future business operations, and therefore, these
costs are not considered by management in making operating
decisions. Management does not believe such charges accurately
reflect the performance of our ongoing operations for the period in
which such charges are incurred.
Integration costs. Integration costs are
severance payments for certain employees relating to our
acquisitions and exit costs related to terminating leases and other
contractual agreements. Accordingly, management believes that such
expenses do not have a direct correlation to future business
operations, and therefore, these costs are not considered by
management in making operating decisions. Management does not
believe such charges accurately reflect the performance of our
ongoing operations for the period in which such charges are
incurred.
Impairment and unoccupied lease charges. Impairment charges
primarily represent remaining lease and termination fees associated
with discontinued facilities. Unoccupied lease charges are rent and
other costs associated with space that is not occupied, which the
Company has placed on the market for sublease. Accordingly,
management believes that such expenses do not have a direct
correlation to future business operations, and therefore, these
costs are not considered by management in making operating
decisions. Management does not believe such charges accurately
reflect the performance of our ongoing operations for the period in
which such charges are incurred.
Changes in contingent consideration. Contingent
consideration represents the amount payable to the sellers of
certain acquired businesses based on the achievement of defined
performance measures contained in the purchase agreements.
Contingent consideration is adjusted to fair value at the end of
each reporting period, and changes arise from changes in the
forecasted revenues of the acquired businesses.
Tax expense (benefit) related to goodwill.
Income tax expense (benefit) resulting from the amortization of
goodwill related to our acquisitions represents a charge (benefit)
to record the tax effect resulting from amortizing goodwill over 15
years for tax purposes. Goodwill is not amortized for GAAP
reporting. This expense is not anticipated to result in a cash
payment.
CareCloud (NASDAQ:MTBC)
Historical Stock Chart
From Aug 2024 to Sep 2024
CareCloud (NASDAQ:MTBC)
Historical Stock Chart
From Sep 2023 to Sep 2024