The Oncology Institute, Inc. (NASDAQ: TOI) (“TOI” or the
“Company”), one of the largest value-based community oncology
groups in the United States, today reported financial results for
its three and nine months ended September 30, 2023 and
reaffirmed its full year 2023 guidance.
Recent Operational
Highlights:
- Opened our 70th
clinic and added 5 physicians bringing our total provider count to
112
- We are live on
Ambience, a tool that utilizes AI technology to further maximize
productivity, drive optimal charge capture, and allow for more
capacity
- Welcomed Jeremy
Castle as our new Chief Operating Officer
- Signed full-risk
capitated contract in South Florida, effective January 1, 2024
Third Quarter 2023 Financial
Highlights
- Consolidated
revenue of $82 million, an increase of 26% compared to the prior
year quarter
- Gross profit of
$16 million, an increase of 23% compared to the prior year quarter,
and gross margin of 19.5%, a decrease from 20.0% the prior year
quarter
- Net loss of
$17.4 million compared to net loss of $2.7 million for the prior
year quarter
- Basic and
diluted (loss) earnings per share of $(0.19) and $(0.19),
respectively, compared to $(0.03) and $(0.17), respectively, for
the prior year quarter
- Adjusted EBITDA
of $(5.3) million compared to $(6.7) million for the prior year
quarter
- Cash, cash
equivalents, and investments of $87.4 million as of September 30,
2023
Management Commentary
Daniel Virnich, CEO of TOI, commented, "I am very pleased with
our performance in the third quarter of 2023, as we delivered
strong growth, expanded our gross margin and reduced SG&A. Our
full-risk capitated contract in South Florida is a significant
milestone for TOI and we are excited to prove our model through
this partnership. Our demonstrated ability to concurrently grow
topline while improving margins lays the groundwork for continued
success in 2024 and beyond."
Reaffirmed Outlook for Fiscal Year
2023
TOI uses Adjusted EBITDA, a non-GAAP metric, as
an additional tool to assess its operational performance. See
"Financial Information: Non-GAAP Financial Measures" below. In
reliance on the unreasonable efforts exception for forward-looking
information provided under Regulation S-K, TOI is not reasonably
able to provide a quantitative reconciliation of Adjusted EBITDA to
net (loss) income, the most directly comparable GAAP financial
measure, without unreasonable efforts due to uncertainties
regarding taxes, share-based compensation, goodwill impairment
charges, change in fair value of liabilities, unrealized (gains)
losses on investments, practice acquisition-related costs,
consulting and legal fees, transaction costs and other non-cash
items. The variability of these items could have an unpredictable,
and potentially significant, impact on TOI’s future GAAP financial
results. TOI expects interest expense in the range of $4 million to
$5 million, other adjustment add backs in the range of $2 million
to $4 million, and depreciation and amortization in the range of $4
million to $6 million. TOI is not adding back new clinic startup or
acquisition costs for this non-GAAP metric.
|
2023 Guidance - Reaffirmed |
|
Revenue |
$290 to $320 million, representing approximately 15% to 27% growth
over 2022 revenue |
|
Gross Profit |
$60 to $70 million |
|
Adjusted EBITDA |
$(25) to $(28) million |
|
Value-based lives(1) |
1.75 million to 2.0 million lives |
(1) Represents lives under capitation
contracts.
TOI's achievement of the anticipated results is
subject to risks and uncertainties, including those disclosed in
its filings with the U.S. Securities and Exchange Commission. The
outlook does not take into account the impact of any unanticipated
developments in the business or changes in the operating
environment, nor does it take into account the impact of TOI's
acquisitions, dispositions or financings during 2023. TOI's outlook
assumes a largely reopened global market, which would be negatively
impacted if closures or other restrictive measures persist or are
reimplemented.
Third Quarter 2023 Results (for the three months ended
September 30, 2023)
Consolidated revenue for Q3 2023 was $82.0
million, an increase of 26.3% compared to Q3 2022, and a 2.3%
increase compared to Q2 2023.
Revenue for patient services was $53.6 million,
up 20.2% compared to Q3 2022. Growth in patient services revenue
was driven by an increase in fee-for-service ("FFS") revenue due to
a practice acquisition and an overall increase in clinic count and
increase in capitation revenue due to capitation contracts.
Dispensary revenue increased 42.2% compared to Q3 2022 due to an
increase in the number of filled prescriptions and the average
revenue per filled prescription. Clinical trials & other
revenue increased by 6.5% compared to Q3 2022 primarily due to an
increase in California Proposition 56 revenue and TOI Clinical
Research revenue.
Gross profit in Q3 2023 was $16.0 million, an
increase of 22.9% compared to Q3 2022. The increase was primarily
driven by improved cost management of oral and IV drugs and
enhanced rebate opportunities. Gross profit is calculated by
subtracting direct costs of patient services, dispensary, and
clinical trials and other from consolidated revenues.
Selling, general and administrative ("SG&A")
expenses in Q3 2023 were $28.2 million or 34.4% of revenue,
compared with $32.0 million, or 49.2% of revenue, in Q3 2022. The
decrease in SG&A was primarily due to decrease in share-based
compensation expense and post-combination expense.
Net loss for Q3 2023 was $17.4 million, an
increase of $14.7 million in net loss compared to Q3 2022 primarily
due to a $19 million gain recognized in Q3 2022 related to the
change in fair value of earnout liabilities and conversion option
derivative liabilities offset by a $1.9 million decrease in change
of share-based compensation expense and $1.7 million decrease in
change of post-combination compensation expense. Adjusted EBITDA
was $(5.4) million in Q3 2023 and $(6.7) million Q3 2022.
Year to Date 2023 Results (for the nine
months ended September 30, 2023)
Consolidated revenue for the nine months ended 2023 was $238.5
million, an increase of 31.7% compared to the nine months ended
2022.
Revenue for patient services the nine months ended 2023 was
$157.3 million, up 32.4% compared to the nine months ended 2022.
Growth in patient services revenue was driven by an increase in
fee-for-service ("FFS") revenue due to practice acquisitions and an
overall increase in clinic count and increase in capitation revenue
due to capitation contracts. Dispensary revenue increased 32.0%
compared to the nine months ended 2022 due to an increase in the
number of filled prescriptions and the average revenue per filled
prescription. Clinical trials & other revenue increased by 7.9%
compared to the nine months ended 2022 primarily due to an increase
in California Proposition 56 revenue and TOI Clinical Research
revenue.
Gross profit in the nine months ended 2023 was $45.2 million, an
increase of 23.9% compared to the nine months ended 2022. The
increase was primarily driven by improved cost management of oral
and IV drugs and enhanced rebate opportunities. Gross profit is
calculated by subtracting direct costs of patient services,
dispensary, and clinical trials and other from consolidated
revenues.
SG&A expenses in the nine months ended 2023 were $85.8
million or 36.0% of revenue, compared with $90.1 million, or 49.8%
of revenue, in the nine months ended 2022. During the nine months
ended 2023, share-based compensation expense was $14 million
compared to $22 million for the same period of 2022.
Net loss for the nine months ended 2023 was $64.3 million
compared to net income of $11.2 million for the nine months ended
2022. A decrease of $75.5 million in income was primarily due to a
$53 million decrease in the change in fair value of earnout
liabilities and $13 million decrease in change in fair value of
conversion option derivative liabilities, as well as a goodwill
impairment charge of $17 million in the nine months ended 2023 that
did not occur in the same period of 2022. Adjusted EBITDA was
$(19.6) million, a decrease of $1 million compared to the nine
months ended 2022.
Webcast and Conference Call
TOI will host a conference call and webcast on
Wednesday, November 8, 2023 at 5:00 p.m. (Eastern Time) to discuss
third quarter results.
The conference call can be accessed live over the phone by
dialing 1-877-407-0789, or for international callers,
1-201-689-8562. A replay will be available two hours after the call
and can be accessed by dialing 1-844-512-2921, or for international
callers, 1-412-317-6671. The passcode for the live call and the
replay is 13739395. The replay will be available until November 15,
2023.
Interested investors and other parties may also
listen to a simultaneous webcast of the conference call by logging
onto the Investor Relations section of TOI's website at
https://investors.theoncologyinstitute.com.
About The Oncology Institute,
Inc.
Founded in 2007, TOI is advancing oncology by
delivering highly specialized, value-based cancer care in the
community setting. TOI offers cutting-edge, evidence-based cancer
care to a population of approximately 1.8 million patients
including clinical trials, transfusions, and other services
traditionally associated with the most advanced care delivery
organizations. With 100+ employed clinicians and more than 700
teammates in over 70 clinic locations and growing, TOI is changing
oncology for the better. For more information visit
www.theoncologyinstitute.com.
Forward-Looking Statements
This press release includes certain statements
that are not historical facts but are forward-looking statements
for purposes of the safe harbor provisions under the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as
“preliminary,” “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“project,” “predict,” “potential,” “guidance,” “approximately,”
“seem,” “seek,” “future,” “outlook,” and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding projections,
anticipated financial results, estimates and forecasts of revenue
and other financial and performance metrics and projections of
market opportunity and expectations. These statements are based on
various assumptions and on the current expectations of TOI and are
not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on by anyone as, a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many
actual events and circumstances are beyond the control of TOI.
These forward-looking statements are subject to a number of risks
and uncertainties, including the accuracy of the assumptions
underlying the 2023 outlook discussed herein, the outcome of
judicial and administrative proceedings to which TOI may become a
party or governmental investigations to which TOI may become
subject that could interrupt or limit TOI’s operations, result in
adverse judgments, settlements or fines and create negative
publicity; changes in TOI’s clients’ preferences, prospects and the
competitive conditions prevailing in the healthcare sector; failure
to continue to meet, or to cure any deficiency with respect to,
stock exchange listing standards; the impact of COVID-19 on TOI’s
business; those factors discussed in the documents of TOI filed, or
to be filed, with the SEC, including the Item 1A. "Risk Factors"
section of TOI's Annual Report on Form 10-K for the year ended
December 31, 2022 filed with the SEC on March 16, 2023, TOI's
Quarterly Report on Form 10-Q for the quarterly period ended March
31, 2023 filed with the SEC on May 10, 2023 and any subsequent
Current Reports on Form 8-K. If the risks materialize or
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks that TOI does not presently know or that
TOI currently believes are immaterial that could also cause actual
results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect TOI’s
plans or forecasts of future events and views as of the date of
this press release. TOI anticipates that subsequent events and
developments will cause TOI’s assessments to change. TOI does not
undertake any obligation to update any of these forward-looking
statements. These forward-looking statements should not be relied
upon as representing TOI’s assessments as of any date subsequent to
the date of this press release. Accordingly, undue reliance should
not be placed upon the forward-looking statements.
Financial Information; Non-GAAP
Financial Measures
Some of the financial information and data
contained in this press release, such as Adjusted EBITDA, have not
been prepared in accordance with United States generally accepted
accounting principles (“GAAP”). TOI believes that the use of
Adjusted EBITDA provides an additional tool to assess operational
performance and trends in, and in comparing our financial measures
with, other similar companies, many of which present similar
non-GAAP financial measures to investors. TOI’s non-GAAP financial
measures may be different from non-GAAP financial measures used by
other companies. The presentation of non-GAAP financial measures is
not intended to be considered in isolation or as a substitute for,
or superior to, financial measures determined in accordance with
GAAP. The principal limitation of Adjusted EBITDA is that it
excludes significant expenses and income that are required by GAAP
to be recorded in TOI's financial statements. Because of the
limitations of non-GAAP financial measures, you should consider the
non-GAAP financial measures presented in this press release in
conjunction with TOI’s financial statements and the related notes
thereto.
TOI defines Adjusted EBITDA as net (loss) income
plus depreciation, amortization, net interest expense, income
taxes, non-cash addbacks, share-based compensation, goodwill
impairment charges, changes in fair value of liabilities,
unrealized gains or losses on investments and other adjustments to
add-back the following: consulting and legal fees related to
acquisitions, deferred consideration payment for practice
acquisition, one-time consulting and legal fees related to certain
advisory projects, software implementations and debt or equity
financings, severance expense and temporary labor and recruiting
charges to build out our corporate infrastructure. A reconciliation
of Adjusted EBITDA to net (loss) income, the most comparable GAAP
metric, is set forth below.
|
Adjusted EBITDA Reconciliation |
| |
Three Months Ended September 30, |
|
Change |
|
(dollars in thousands) |
|
2023 |
|
|
|
2022 |
|
|
$ |
|
% |
|
Net loss |
$ |
(17,419 |
) |
|
$ |
(2,674 |
) |
|
$ |
(14,745 |
) |
|
|
551.4 |
% |
| Depreciation and
amortization |
$ |
1,698 |
|
|
$ |
1,134 |
|
|
$ |
564 |
|
|
|
49.7 |
% |
| Interest expense, net |
$ |
1,755 |
|
|
$ |
1,498 |
|
|
$ |
257 |
|
|
|
17.2 |
% |
| Income tax expense
(benefit) |
$ |
135 |
|
|
$ |
(25 |
) |
|
$ |
160 |
|
|
|
(640.0 |
)% |
| Non-cash addbacks(1) |
$ |
(14 |
) |
|
$ |
299 |
|
|
$ |
(313 |
) |
|
|
(104.7 |
)% |
| Share-based compensation |
$ |
4,657 |
|
|
$ |
6,546 |
|
|
$ |
(1,889 |
) |
|
|
(28.9 |
)% |
| Changes in fair value of
liabilities |
$ |
1,464 |
|
|
$ |
(18,932 |
) |
|
$ |
20,396 |
|
|
|
(107.7 |
)% |
| Unrealized (gains) losses on
investments |
$ |
(157 |
) |
|
$ |
33 |
|
|
$ |
(190 |
) |
|
|
(575.8 |
)% |
| Practice acquisition-related
costs(2) |
$ |
41 |
|
|
$ |
166 |
|
|
$ |
(125 |
) |
|
|
(75.3 |
)% |
| Post-combination compensation
expense(3) |
$ |
399 |
|
|
$ |
2,088 |
|
|
$ |
(1,689 |
) |
|
|
(80.9 |
)% |
| Consulting and legal
fees(4) |
$ |
1 |
|
|
$ |
883 |
|
|
$ |
(882 |
) |
|
|
(99.9 |
)% |
| Infrastructure and workforce
costs(5) |
$ |
1,978 |
|
|
$ |
1,239 |
|
|
$ |
739 |
|
|
|
59.6 |
% |
| Transaction costs(6) |
$ |
112 |
|
|
$ |
1,001 |
|
|
$ |
(889 |
) |
|
|
(88.8 |
)% |
| Adjusted
EBITDA |
$ |
(5,350 |
) |
|
$ |
(6,744 |
) |
|
$ |
1,394 |
|
|
|
(20.7 |
)% |
(1) During the three months ended September
30, 2023, non-cash addbacks were primarily comprised of non-cash
rent of $45 and net reversal of bad debt recovery of $32. During
the three months ended September 30, 2022, non-cash addbacks were
primarily comprised of reversals of bad debt recoveries of $143 and
non-cash rent of $148.
(2) Practice acquisition-related costs were
comprised of consulting and legal fees incurred to perform due
diligence, execute, and integrate acquisitions of various oncology
practices.
(3) Deferred consideration payments for
practice acquisitions that are contingent upon the seller’s future
employment at the Company.
(4) Consulting and legal fees were
comprised of a subset of the Company’s total consulting and legal
fees, and related to certain advisory projects during the three
months ended September 30, 2023. During the three months ended
September 30, 2022, these fees related to advisory projects,
software implementations, and legal fees for debt financing and
predecessor litigation matters.
(5) Infrastructure and workforce costs were
comprised of recruiting expenses to build out corporate
infrastructure of $701 and $798, software implementation fees of
$37 and $31, severance expenses resulting from cost rationalization
programs of $633 and $117, temporary labor of $310 and $291, and
miscellaneous expense EBITDA addback of $295 and $0 during the
three months ended September 30, 2023 and 2022, respectively.
(6) Transaction costs incurred during the
three months ended September 30, 2023 were comprised of consulting,
legal, administrative and regulatory fees associated with share
repurchases.
| |
Nine Months Ended September 30, |
|
Change |
|
(dollars in thousands) |
|
2023 |
|
|
|
2022 |
|
|
$ |
|
% |
|
Net (loss) income |
$ |
(64,314 |
) |
|
$ |
11,159 |
|
|
$ |
(75,473 |
) |
|
|
(676.3 |
)% |
| Depreciation and
amortization |
$ |
4,296 |
|
|
$ |
3,219 |
|
|
$ |
1,077 |
|
|
|
33.5 |
% |
| Interest expense, net |
$ |
4,836 |
|
|
$ |
1,633 |
|
|
$ |
3,203 |
|
|
|
196.1 |
% |
| Income tax expense |
$ |
278 |
|
|
$ |
124 |
|
|
$ |
154 |
|
|
|
124.2 |
% |
| Non-cash addbacks(1) |
$ |
153 |
|
|
$ |
604 |
|
|
$ |
(451 |
) |
|
|
(74.7 |
)% |
| Share-based compensation |
$ |
13,731 |
|
|
$ |
21,612 |
|
|
$ |
(7,881 |
) |
|
|
(36.5 |
)% |
| Goodwill impairment
charges |
$ |
16,867 |
|
|
$ |
— |
|
|
$ |
16,867 |
|
|
N/A |
| Changes in fair value of
liabilities |
$ |
(2,884 |
) |
|
$ |
(69,776 |
) |
|
$ |
66,892 |
|
|
|
(95.9 |
)% |
| Unrealized (gains) losses on
investments |
$ |
(31 |
) |
|
$ |
33 |
|
|
$ |
(64 |
) |
|
|
(193.9 |
)% |
| Practice acquisition-related
costs(2) |
$ |
112 |
|
|
$ |
699 |
|
|
$ |
(587 |
) |
|
|
(84.0 |
)% |
| Post-combination compensation
expense(3) |
$ |
1,562 |
|
|
$ |
2,088 |
|
|
$ |
(526 |
) |
|
|
(25.2 |
)% |
| Consulting and legal
fees(4) |
$ |
1,515 |
|
|
$ |
2,682 |
|
|
$ |
(1,167 |
) |
|
|
(43.5 |
)% |
| Infrastructure and workforce
costs(5) |
$ |
4,181 |
|
|
$ |
3,826 |
|
|
$ |
355 |
|
|
|
9.3 |
% |
| Transaction costs(6) |
$ |
140 |
|
|
$ |
3,195 |
|
|
$ |
(3,055 |
) |
|
|
(95.6 |
)% |
| Adjusted
EBITDA |
$ |
(19,558 |
) |
|
$ |
(18,902 |
) |
|
$ |
(656 |
) |
|
|
3.5 |
% |
(1) During the nine months ended September
30, 2023, non-cash addbacks were primarily comprised of non-cash
rent of $121 and bad debt write off, net of recovery, of $31.
During the nine months ended September 30, 2022, non-cash addbacks
were primarily comprised of net credit losses of $402 and non-cash
rent of $180.
(2) Practice acquisition-related costs were
comprised of consulting and legal fees incurred to perform due
diligence, execute, and integrate acquisitions of various oncology
practices.
(3) Deferred consideration payments for
practice acquisitions that are contingent upon the seller’s future
employment at the Company.
(4) Consulting and legal fees were
comprised of a subset of the Company’s total consulting and legal
fees, and related to certain advisory projects during the nine
months ended September 30, 2023. During the nine months ended
September 30, 2022, these fees related to advisory projects,
software implementations, and legal fees for debt financing and
predecessor litigation matters.
(5) Infrastructure and workforce costs were
comprised primarily of recruiting expenses to build out corporate
infrastructure of $1,593 and $2,429, software implementation fees
of $89 and $88, severance expenses resulting from cost
rationalization programs of $898 and $203, and temporary labor of
$1,217 and $1,105 during the nine months ended September 30, 2023
and 2022, respectively.
(6) Transaction costs incurred during the
nine months ended September 30, 2023 were comprised of consulting,
legal, administrative and regulatory fees associated with share
repurchases and one practice acquisition.
|
Key Business Metrics |
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Clinics(1) |
|
84 |
|
|
|
74 |
|
|
|
84 |
|
|
|
74 |
|
| Markets |
|
15 |
|
|
|
14 |
|
|
|
15 |
|
|
|
14 |
|
| Lives under value-based
contracts (millions) |
|
1.8 |
|
|
|
1.7 |
|
|
|
1.8 |
|
|
|
1.7 |
|
|
Net (loss) income |
$ |
(17,419 |
) |
|
$ |
(2,674 |
) |
|
$ |
(64,314 |
) |
|
$ |
11,159 |
|
| Adjusted EBITDA (in
thousands)(2) |
$ |
(5,350 |
) |
|
$ |
(6,744 |
) |
|
$ |
(19,558 |
) |
|
$ |
(18,902 |
) |
(1) Includes independent oncology practices
to which we provide limited management services, but do not bear
the operating costs.
(2) Adjusted EBITDA is a "non-GAAP" financial
measure within the meaning of Item 10 of Regulation S-K promulgated
by the SEC. The Company defines Adjusted EBITDA as net income
(loss) adjusting for:
-
Depreciation and amortization,
- Interest
expense, net,
- Income
tax expense,
- Non-cash
addbacks,
-
Share-based compensation,
- Goodwill
impairment charges
- Changes
in fair value of liabilities,
-
Unrealized (gains) losses on investments
- Practice
acquisition-related costs,
- Post
combination compensation expense,
-
Consulting and legal fees,
-
Infrastructure and workforce costs, and
-
Transaction costs.
The Company includes Adjusted EBITDA because it
is an important measure which our management uses to assess the
results of operations, to evaluate factors and trends affecting the
business, and to plan and forecast future periods.
Management believes that this measure provides
an additional way of viewing aspects of the Company's operations
that, when viewed with the GAAP results, provides a more complete
understanding of the Company's results of operations and the
factors and trends affecting the business. However, non-GAAP
financial measures should be considered a supplement to, and not as
a substitute for, or superior to, the corresponding measures
calculated in accordance with U.S. GAAP. Non-GAAP financial
measures used by management may differ from the non-GAAP measures
used by other companies, including the Company's competitors.
Management encourages investors and others to review the Company's
financial information in its entirety, not to rely on any single
financial measure.
Consolidated Balance Sheets
(Unaudited)(in thousands except share data)
| |
September 30, 2023 |
|
December 31, 2022 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and restricted cash |
$ |
27,535 |
|
|
$ |
14,010 |
|
|
Current marketable securities |
|
59,877 |
|
|
|
59,796 |
|
|
Accounts receivable, net |
|
48,442 |
|
|
|
39,816 |
|
|
Other receivables |
|
464 |
|
|
|
617 |
|
|
Inventories, net |
|
12,174 |
|
|
|
9,261 |
|
|
Prepaid expenses |
|
4,190 |
|
|
|
6,918 |
|
|
Total current assets |
|
152,682 |
|
|
|
130,418 |
|
|
Noncurrent marketable securities |
|
— |
|
|
|
58,354 |
|
|
Property and equipment, net |
|
10,787 |
|
|
|
8,547 |
|
|
Operating right of use assets |
|
28,533 |
|
|
|
24,494 |
|
|
Intangible assets, net |
|
18,561 |
|
|
|
17,957 |
|
|
Goodwill |
|
7,230 |
|
|
|
21,418 |
|
|
Other assets |
|
560 |
|
|
|
477 |
|
|
Total assets |
$ |
218,353 |
|
|
$ |
261,665 |
|
|
Liabilities and stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
13,333 |
|
|
$ |
9,372 |
|
|
Current portion of operating lease liabilities |
|
6,079 |
|
|
|
5,498 |
|
|
Income taxes payable |
|
255 |
|
|
|
255 |
|
|
Accrued expenses and other current liabilities |
|
12,723 |
|
|
|
14,595 |
|
|
Total current liabilities |
|
32,390 |
|
|
|
29,720 |
|
|
Operating lease liabilities |
|
26,014 |
|
|
|
22,060 |
|
|
Derivative warrant liabilities |
|
292 |
|
|
|
350 |
|
|
Derivative earnout liabilities |
|
11 |
|
|
|
803 |
|
|
Conversion option derivative liabilities |
|
1,926 |
|
|
|
3,960 |
|
|
Long-term debt, net of unamortized debt issuance costs |
|
85,254 |
|
|
|
80,621 |
|
|
Other non-current liabilities |
|
459 |
|
|
|
868 |
|
|
Deferred income taxes liability |
|
158 |
|
|
|
108 |
|
|
Total liabilities |
|
146,504 |
|
|
|
138,490 |
|
|
Stockholders’ equity: |
|
|
|
| Common Stock, $0.0001 par
value, authorized 500,000,000 shares; 75,447,285 shares issued and
73,713,511 shares outstanding at September 30, 2023 and 73,265,621
shares issued and outstanding at December 31, 2022 |
|
8 |
|
|
|
7 |
|
|
Series A Convertible Preferred Stock, $0.0001 par value, authorized
10,000,000 shares; 165,045 shares issued and outstanding at
September 30, 2023 and December 31, 2022 |
|
— |
|
|
|
— |
|
|
Additional paid-in capital |
|
200,256 |
|
|
|
186,250 |
|
|
Treasury Stock at cost, 1,733,774 and 0 shares at September 30,
2023 and December 31, 2022 |
|
(1,019 |
) |
|
|
— |
|
|
Accumulated deficit |
|
(127,396 |
) |
|
|
(63,082 |
) |
|
Total stockholders’ equity |
|
71,849 |
|
|
|
123,175 |
|
|
Total liabilities and stockholders’ equity |
$ |
218,353 |
|
|
$ |
261,665 |
|
| |
|
|
|
Consolidated Statements of Operations
(Unaudited)(in thousands except share data)
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue |
|
|
|
|
|
|
|
|
Patient services |
$ |
53,634 |
|
|
$ |
44,627 |
|
|
$ |
157,333 |
|
|
$ |
118,793 |
|
|
Dispensary |
|
26,792 |
|
|
|
18,839 |
|
|
|
76,228 |
|
|
|
57,736 |
|
|
Clinical trials & other |
|
1,609 |
|
|
|
1,511 |
|
|
|
4,890 |
|
|
|
4,530 |
|
| Total operating
revenue |
|
82,035 |
|
|
|
64,977 |
|
|
|
238,451 |
|
|
|
181,059 |
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Direct costs – patient services |
|
44,961 |
|
|
|
36,126 |
|
|
|
132,653 |
|
|
|
96,379 |
|
|
Direct costs – dispensary |
|
21,072 |
|
|
|
15,738 |
|
|
|
60,328 |
|
|
|
47,816 |
|
|
Direct costs – clinical trials & other |
|
24 |
|
|
|
113 |
|
|
|
276 |
|
|
|
400 |
|
|
Goodwill impairment charges |
|
— |
|
|
|
— |
|
|
|
16,867 |
|
|
|
— |
|
|
Selling, general and administrative expense |
|
28,205 |
|
|
|
31,963 |
|
|
|
85,761 |
|
|
|
90,117 |
|
|
Depreciation and amortization |
|
1,698 |
|
|
|
1,134 |
|
|
|
4,296 |
|
|
|
3,219 |
|
|
Total operating expenses |
|
95,960 |
|
|
|
85,074 |
|
|
|
300,181 |
|
|
|
237,931 |
|
| Loss from
operations |
|
(13,925 |
) |
|
|
(20,097 |
) |
|
|
(61,730 |
) |
|
|
(56,872 |
) |
| Other non-operating
expense (income) |
|
|
|
|
|
|
|
| Interest expense |
|
2,695 |
|
|
|
1,497 |
|
|
|
8,017 |
|
|
|
1,632 |
|
|
Interest income |
|
(940 |
) |
|
|
— |
|
|
|
(3,181 |
) |
|
|
— |
|
|
Change in fair value of derivative warrant liabilities |
|
203 |
|
|
|
159 |
|
|
|
(58 |
) |
|
|
(445 |
) |
|
Change in fair value of earnout liabilities |
|
(23 |
) |
|
|
(3,581 |
) |
|
|
(792 |
) |
|
|
(53,821 |
) |
|
Change in fair value of conversion option derivative
liabilities |
|
1,284 |
|
|
|
(15,510 |
) |
|
|
(2,034 |
) |
|
|
(15,510 |
) |
|
Gain on debt extinguishment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(183 |
) |
|
Other, net |
|
140 |
|
|
|
36 |
|
|
|
354 |
|
|
|
172 |
|
|
Total other non-operating income (loss) |
|
3,359 |
|
|
|
(17,399 |
) |
|
|
2,306 |
|
|
|
(68,155 |
) |
| (Loss) income before
provision for income taxes |
|
(17,284 |
) |
|
|
(2,698 |
) |
|
|
(64,036 |
) |
|
|
11,283 |
|
| Income tax (expense)
benefit |
|
(135 |
) |
|
|
24 |
|
|
|
(278 |
) |
|
|
(124 |
) |
|
Net (loss) income |
$ |
(17,419 |
) |
|
$ |
(2,674 |
) |
|
$ |
(64,314 |
) |
|
$ |
11,159 |
|
| Net
(loss) income per share attributable to common
stockholders: |
|
Basic |
$ |
(0.19 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.71 |
) |
|
$ |
0.12 |
|
|
Diluted |
$ |
(0.19 |
) |
|
$ |
(0.17 |
) |
|
$ |
(0.71 |
) |
|
$ |
(0.03 |
) |
|
Weighted-average number of shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
73,469,101 |
|
|
|
72,184,366 |
|
|
|
73,679,454 |
|
|
|
72,807,277 |
|
|
Diluted |
|
73,469,101 |
|
|
|
79,581,304 |
|
|
|
73,679,454 |
|
|
|
75,300,018 |
|
Consolidated Statements of Cash Flows
(Unaudited)(in thousands)
| |
Nine Months Ended September 30, |
|
|
|
2023 |
|
|
|
2022 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net (loss) income |
$ |
(64,314 |
) |
|
$ |
11,159 |
|
|
Adjustments to reconcile net (loss) income to cash and cash
equivalents used in operating activities: |
|
Depreciation and amortization |
|
4,296 |
|
|
|
3,219 |
|
|
Amortization of debt issuance costs and debt discount |
|
4,633 |
|
|
|
892 |
|
|
Goodwill impairment charges |
|
16,867 |
|
|
|
— |
|
|
Share-based compensation |
|
13,731 |
|
|
|
21,613 |
|
|
Change in fair value of liability classified warrants |
|
(58 |
) |
|
|
(445 |
) |
|
Change in fair value of liability classified earnouts |
|
(792 |
) |
|
|
(53,821 |
) |
|
Change in fair value of liability classified conversion option
derivatives |
|
(2,034 |
) |
|
|
(15,510 |
) |
|
Realized loss on sale of investments |
|
11 |
|
|
|
— |
|
|
Unrealized (gain) loss on investments |
|
(44 |
) |
|
|
62 |
|
|
Accretion of discount on investment securities |
|
(712 |
) |
|
|
(29 |
) |
|
Deferred taxes |
|
50 |
|
|
|
183 |
|
|
Gain on loan forgiveness |
|
— |
|
|
|
(183 |
) |
|
Credit losses |
|
31 |
|
|
|
402 |
|
|
Loss on disposal of property and equipment |
|
— |
|
|
|
22 |
|
| Changes in operating assets
and liabilities: |
|
|
|
|
Accounts receivable |
|
(8,657 |
) |
|
|
(15,215 |
) |
|
Inventories |
|
(2,913 |
) |
|
|
(2,584 |
) |
|
Other receivables |
|
153 |
|
|
|
678 |
|
|
Prepaid expenses |
|
2,728 |
|
|
|
3,545 |
|
|
Operating lease right-of-use assets |
|
4,448 |
|
|
|
3,720 |
|
|
Other assets |
|
(83 |
) |
|
|
(141 |
) |
|
Accrued expenses and other current liabilities |
|
579 |
|
|
|
2,894 |
|
|
Income taxes payable |
|
— |
|
|
|
255 |
|
|
Accounts payable |
|
3,961 |
|
|
|
(4,404 |
) |
|
Current and long-term operating lease liabilities |
|
(3,909 |
) |
|
|
(2,998 |
) |
|
Other non-current liabilities |
|
(394 |
) |
|
|
(1,073 |
) |
|
Net cash and cash equivalents used in operating
activities |
|
(32,436 |
) |
|
|
(47,759 |
) |
|
Cash flows from investing activities: |
|
|
|
|
Purchases of property and equipment |
|
(3,706 |
) |
|
|
(3,534 |
) |
|
Cash paid for practice acquisitions |
|
(4,300 |
) |
|
|
(8,107 |
) |
|
Purchases of marketable securities/investments |
|
(9,683 |
) |
|
|
(87,402 |
) |
|
Sales of marketable securities/investments |
|
68,702 |
|
|
|
— |
|
|
Net cash and cash equivalents provided by (used in)
investing activities |
|
51,027 |
|
|
|
(99,043 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from issuance of long-term debt |
|
— |
|
|
|
110,000 |
|
|
Transactions costs related to issuance of long-term debt |
|
— |
|
|
|
(3,663 |
) |
|
Payments made for financing of insurance payments |
|
(3,010 |
) |
|
|
(3,739 |
) |
|
Payment of deferred consideration liability for acquisition |
|
(959 |
) |
|
|
(509 |
) |
|
Principal payments on financing leases |
|
(91 |
) |
|
|
(39 |
) |
|
Common stock repurchase |
|
(1,019 |
) |
|
|
(9,000 |
) |
|
Common stock issued for options exercised |
|
13 |
|
|
|
416 |
|
|
Taxes for common stock net settled |
|
— |
|
|
|
(413 |
) |
|
Net cash and cash equivalents provided by (used in)
financing activities |
|
(5,066 |
) |
|
|
93,053 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
13,525 |
|
|
|
(53,749 |
) |
|
Cash and cash equivalents at beginning of
period |
|
14,010 |
|
|
|
115,174 |
|
|
Cash and cash equivalents at end of period |
$ |
27,535 |
|
|
$ |
61,425 |
|
Contacts
Media
The Oncology Institute, Inc.Daniel Virnich,
MDdanielvirnich@theoncologyinstitute.com(562) 735-3226 x 81125
ReviveMichael
Petronempetrone@reviveagency.com(615) 760-4542
Investors
Solebury Strategic
Communicationsinvestors@theoncologyinstitute.com
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