- Q1 2021 Financial Highlights:
- Total net revenue was $16.2 million, nearly all of which was
software-related revenue
- Gross margin was 56% of total revenue
- Post Quarter End:
- Completed $137.5 million in new financing
- Launched Eviti® Connect for autoimmune diseases, which affects
more than 50 million in the U.S. alone
- Eviti Connect won the MedTech Breakthrough award for "Best
MedTech Overall Software"
NantHealth, Inc. (NASDAQ-GS: NH), a provider of enterprise
solutions that help businesses transform complex data into
actionable insights, today reported financial results for its first
quarter ended March 31, 2021.
“Last month, we successfully completed a $137.5 million
financing transaction and will use a portion of the proceeds to
retire our existing convertible notes,” said Ron Louks, Chief
Operating Officer, NantHealth. “We intend to use the balance of the
proceeds to, among other things, support our growth initiatives,
which include further developing our existing SaaS offerings,
expanding our recently acquired OpenNMS business and investing in
our data services and cloud capabilities.
“Turning to our 2021 first-quarter financial results, as
expected revenues declined largely due to the accounting for
amortization of services related to expired or renewed contracts at
the end of the 2020 fourth quarter. While we remain committed to
managing our overhead costs, we have continued the ramp up of our
investment in research and development to improve and expand the
innovative solutions we bring to our customers.
“Looking ahead, we see growing opportunities to expand and
diversify our business within and beyond healthcare. Earlier this
week, we launched Eviti Connect for autoimmune diseases, extending
our proven payer solution beyond oncology, and announced plans to
further develop the Eviti platform to allow us to expand into
additional disease states, over time. In addition, we are expanding
OpenNMS offerings to include a new cloud-based platform to
supplement our already robust on-premise platform, which will both
broaden the solutions we offer to our healthcare customers and
attract new customers across a variety of industries.”
Software and Services Highlights:
- Clinical Decision Support (Eviti®):
- In May, launched Eviti Connect for autoimmune diseases,
bringing the Company’s payer solution for oncology to a disease
type that affects more than 50 million in the U.S. alone. The
Company developed a new, flexible platform that will enable it to
expand into disease areas beyond oncology and autoimmune
- Launched Eviti Connect 8.4, which included:
- New functionality enables drug customization per payer or line
of business providing more flexibility to meet diverse policies
within the payer organization
- New payer communication capability that reduces delays in
treatment plan reviews
- In May, Eviti Connect won the MedTech Breakthrough award for
"Best MedTech Overall Software," recognized for the platform's
innovative ability to break through digital health and technology
markets
- Payer Engagement (NaviNet® and Population Health Management):
- Continued customer renewals, securing three multi-year
agreements in Q1 with over $700K of annual contract value
- AllPayer, the Company's direct-to-provider solution, had its
seventh consecutive quarter of growth
- Enhanced NaviNet essential workflows to support automation and
promote greater usability
- Open Authorizations now allows health plans to configure rules
defining which services do not require prior authorization. This
increases transparency for providers and saves time by eliminating
unnecessary requests
- New Referral Submission API enables providers to automate
management of referral requests through NaviNet, making it easier
to guide patients to optimal quality and cost referral sites
- Announced Population Health Management, a new product offering
that integrates multiple data sources into one platform, providing
a more complete view of the patient. This enables payers and
providers to engage proactively with patients, increasing the
quality of care while reducing costs
- Network Monitoring and Management (OpenNMS®):
- Deployed a solution for a global energy customer that scales
the monitoring and analysis of network communications by
aggregating the data streams (netflow) to greatly improve
scalability and usability of the solution
- Initiated a Zero-touch Appliance service pilot with a large
national retailer
Business and Financial Highlights
For the 2021 first quarter:
- Total net revenue was $16.2 million compared with $18.2 million
in Q1 of 2020. Within total revenue, total software-related revenue
was $16.2 million compared with $18.1 million in prior-year first
quarter.
- Gross profit was $9.1 million, or 56% of total net revenue,
compared with $11.0 million, or 60% of total net revenue, for the
prior-year period.
- Selling, general and administrative (SG&A) expenses
increased to $12.5 million from $12.4 million in the 2020 first
quarter.
- Research and development (R&D) expenses increased to $5.0
million from $3.6 million.
- Net loss from continuing operations attributable to NantHealth,
net of tax, was $15.4 million, or $0.14 per share, compared with
$8.9 million, or $0.08 per share, in the 2020 first quarter.
- Non-GAAP net loss from continuing operations attributable to
NantHealth was $9.6 million, or $0.09 per share, compared with $6.1
million, or $0.06 per share, for the first quarter of 2020.
- At March 31, 2021, cash and cash equivalents totaled $10.8
million.
Conference Call Information and Forward-Looking
Statements
Later today, the company will host a conference call at 1:30
p.m. PT (4:30 p.m. ET) to review its results of operations for the
first quarter ended March 31, 2021. The conference call will be
available to interested parties by dialing 844-309-3709 from the
U.S. or Canada, or 281-962-4864 from international locations,
passcode 8364209. The call will be broadcast via the Internet at
www.nanthealth.com. Listeners are encouraged to visit the website
at least 10 minutes prior to the start of the scheduled
presentation to register, download and install any necessary audio
software. A playback of the call will be archived and accessible on
the same website for at least three months.
Discussion during the conference call may include
forward-looking statements regarding topics such as the company’s
financial status and performance, regulatory and operational
developments, and other comments the company may make about its
future plans or prospects in response to questions from
participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial
measures, including adjusted net loss and adjusted net loss per
share, which are financial measures that are not prepared in
conformity with United States generally accepted accounting
principles (U.S. GAAP). The Company’s management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor’s overall understanding of the
financial results for the Company’s core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company’s core business between current, past and future
periods. Other companies may define these measures in different
ways. Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S. GAAP.
Non-GAAP per share numbers are calculated based on one class of
common stock and do not incorporate the effects, if any, of using
the two-class method.
About NantHealth, Inc.
NantHealth, a member of the NantWorks ecosystem of companies,
provides enterprise solutions that help businesses transform
complex data into actionable insights. By offering efficient ways
to move, interpret and visualize complex and highly sensitive
information, NantHealth enables customers in healthcare, life
sciences, logistics, telecommunications and other industries to
automate, understand and act on data while keeping it secure and
scalable. NantHealth’s product portfolio comprises the latest
technology in payer/provider collaboration platforms for real-time
coverage decision support (Eviti and NaviNet), molecular analysis
(GPS Cancer) and data solutions that provide multi-data analysis,
reporting and professional services offerings (Quadris). OpenNMS, a
NantHealth subsidiary, helps businesses monitor and manage network
health and performance. For more information, visit nanthealth.com,
follow us on Twitter, Facebook and LinkedIn, and subscribe to our
blog.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Forward-looking statements can be identified by the
words “expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. Risks and uncertainties include, but are not limited to: our
ability to successfully integrate a complex learning system to
address a wide range of healthcare issues; our ability to
successfully amass the requisite data to achieve maximum network
effects; appropriately allocating financial and human resources
across a broad array of product and service offerings; raising
additional capital as necessary to fund our operations; achieving
significant commercial market acceptance for our sequencing and
molecular analysis solutions; establish relationships with, key
thought leaders or payers’ key decision makers in order to
establish GPS Cancer as a standard of care for patients with
cancer; our ability to grow the market for our Systems
Infrastructure, and applications; successfully enhancing our
Systems Infrastructure and applications to achieve market
acceptance and keep pace with technological developments; customer
concentration; competition; security breaches; bandwidth
limitations; our ability to integrate OpenNMS into our operations;
our ability to obtain regulatory approvals; dependence upon senior
management; the need to comply with and meet applicable laws and
regulations; unexpected adverse events; clinical adoption and
market acceptance of GPS Cancer; and anticipated cost savings. We
undertake no obligation to update any forward-looking statement in
light of new information or future events, except as otherwise
required by law. Forward-looking statements involve inherent risks
and uncertainties, most of which are difficult to predict and are
generally beyond our control. Actual results or outcomes may differ
materially from those implied by the forward-looking statements as
a result of the impact of a number of factors, many of which are
discussed in more detail in our reports filed with the Securities
and Exchange Commission.
FINANCIAL TABLES FOLLOW
NantHealth, Inc.
Consolidated Balance
Sheets
(Dollars in thousands)
(unaudited)
March 31,
2021
December 31,
2020
Assets
Current assets
Cash and cash equivalents
$
10,810
$
22,787
Accounts receivable, net
4,705
3,273
Related party receivables, net
990
1,031
Prepaid expenses and other current
assets
4,549
3,504
Total current assets
21,054
30,595
Property, plant, and equipment, net
12,859
13,102
Goodwill
98,333
98,333
Intangible assets, net
45,737
47,969
Related party receivable, net of
current
858
823
Operating lease right-of-use assets
7,193
7,539
Other assets
1,932
1,927
Total assets
$
187,966
$
200,288
Liabilities and Stockholders'
Equity
Current liabilities
Accounts payable
$
1,598
$
5,122
Accrued and other current liabilities
15,832
13,975
Deferred revenue
1,217
1,166
Related party payables, net
4,092
4,238
Notes payable
—
268
Related party convertible note, net
9,963
9,411
Convertible notes, net
96,095
90,578
Total current liabilities
128,797
124,758
Deferred revenue, net of current
611
393
Related party liabilities
32,860
31,091
Related party promissory note
112,666
112,666
Deferred income taxes, net
1,752
1,853
Operating lease liabilities
7,723
8,170
Other liabilities
35,198
32,757
Total liabilities
319,607
311,688
Stockholders' deficit
Common stock, $0.0001 par value per share,
750,000,000 shares authorized; 111,366,133 and 111,284,733 shares
issued and outstanding at March 31, 2021 and December 31, 2020,
respectively
11
11
Additional paid-in capital
878,241
891,583
Accumulated deficit
(1,010,046
)
(1,003,210
)
Accumulated other comprehensive loss
(140
)
(168
)
Total NantHealth stockholders' deficit
(131,934
)
(111,784
)
Noncontrolling interests
293
384
Total stockholders' deficit
$
(131,641
)
$
(111,400
)
Total liabilities and stockholders'
deficit
$
187,966
$
200,288
NantHealth, Inc.
Consolidated Statements of
Operations
(Dollars in thousands, except per
share amounts)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Revenue
Software-as-a-service related
$
15,757
$
18,121
Maintenance
383
—
Professional services
27
—
Total software-related revenue
16,167
18,121
Sequencing and molecular analysis
3
59
Total net revenue
16,170
18,180
Cost of Revenue
Software-as-a-service related
5,535
5,701
Maintenance
207
—
Professional services
7
—
Amortization of developed technologies
1,247
1,143
Total software-related cost of revenue
6,996
6,844
Sequencing and molecular analysis
47
352
Total cost of revenue
7,043
7,196
Gross Profit
9,127
10,984
Operating Expenses
Selling, general and administrative
12,502
12,427
Research and development
5,013
3,550
Amortization of acquisition-related
assets
985
867
Total operating expenses
18,500
16,844
Loss from operations
(9,373
)
(5,860
)
Interest expense, net
(3,568
)
(4,657
)
Other (expense) income, net
(2,570
)
3,454
Loss from related party equity method
investment
—
(1,784
)
Loss from continuing operations before
income taxes
(15,511
)
(8,847
)
(Benefit from) provision for income
taxes
(8
)
93
Net loss from continuing operations
(15,503
)
(8,940
)
Income from discontinued operations, net
of tax attributable to NantHealth
4
32,005
Net (loss) income
(15,499
)
23,065
Net loss attributable to noncontrolling
interests
(91
)
—
Net (loss) income attributable to
NantHealth
$
(15,408
)
$
23,065
Basic and diluted net income (loss) per
share attributable to NantHealth:
Continuing operations - common stock
$
(0.14
)
$
(0.08
)
Discontinued operations - common stock
$
—
$
0.29
Total net (loss) income per share - common
stock
$
(0.14
)
$
0.21
Weighted average shares
outstanding
Basic and diluted - common stock
111,319,061
110,619,780
NantHealth, Inc.
Non-GAAP Net Loss from
Continuing Operations Attributable to NantHealth and
Non-GAAP Net Loss Per Share
from Continuing Operations Attributable to NantHealth
(Dollars in thousands, except per
share amounts)
(Unaudited)
Three Months Ended
March 31,
2021
2020
Net loss from continuing operations
attributable to NantHealth
$
(15,412
)
$
(8,940
)
Adjustments to GAAP net loss from
continuing operations attributable to NantHealth:
Loss from related party equity method
investment
—
1,784
Stock-based compensation expense from
continuing operations
883
732
Change in fair value of derivatives
liability
(4
)
5
Change in fair value of Bookings
Commitment
2,463
(3,128
)
Noncash interest expense related to
convertible notes
323
1,542
Intangible amortization from continuing
operations
2,212
2,010
Securities litigation costs
—
(103
)
Tax (benefit) provision resulting from
certain noncash tax items
(43
)
—
Total adjustments to GAAP net loss from
continuing operations attributable to NantHealth
5,834
2,842
Net loss from continuing operations
attributable to NantHealth - Non-GAAP
$
(9,578
)
$
(6,098
)
Weighted average basis common shares
outstanding
111,319,061
110,619,780
Net loss per common share from
continuing operations attributable to NantHealth - Non-GAAP
$
(0.09
)
$
(0.06
)
Reconciliation of Net Loss per
Common Share from Continuing Operations Attributable to
NantHealth
to Net Loss per Common Share
from Continuing Operations Attributable to NantHealth -
Non-GAAP
(Unaudited)
Three Months Ended
March 31,
2021
2020
Net loss per common share from continuing
operations attributable to NantHealth
$
(0.14
)
$
(0.08
)
Adjustments to GAAP net loss per common
share from continuing operations attributable to NantHealth:
Loss from related party equity method
investment
—
0.01
Stock-based compensation expense from
continuing operations
0.01
0.01
Change in fair value of derivatives
liability
—
—
Change in fair value of Bookings
Commitment
0.02
(0.03
)
Noncash interest expense related to
convertible notes
—
0.01
Intangible amortization from continuing
operations
0.02
0.02
Securities litigation costs
—
—
Tax (benefit) provision resulting from
certain noncash tax items
—
—
Total adjustments to GAAP net loss per
common share from continuing operations attributable to
NantHealth
0.05
0.02
Net loss per common share from
continuing operations attributable to NantHealth - Non-GAAP
$
(0.09
)
$
(0.06
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210506005944/en/
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com
424.288.4098
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