- Q3 2020 Financial Highlights:
- Total net revenue was $18.8 million, up from $18.6
million
- Total software-related revenue increased to $18.7 million
from $18.3 million in Q3 2019 and rose 7% from Q2 2020
- Recently acquired OpenNMS Group contributed revenue
- Gross margin remained steady at 60% of total
revenue
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 third
quarter ended September 30, 2020.
“Our 2020 third quarter total software-related revenue increased
to $18.7 million from $18.3 million for the same quarter last year
and climbed 7% on a sequential quarterly basis,” said Ron Louks,
Chief Operating Officer, NantHealth. “The current year third
quarter included a revenue contribution from our recently completed
acquisition of OpenNMS. We are pleased to report that our gross
margin remained strong at 60% of total revenue, selling, general
and administrative expenses were lower, and our bottom line
improved considerably. We view our overall financial performance as
a solid achievement, given the challenges associated with operating
during the ongoing pandemic.
“At the same time, we ramped up our investment in R&D. We
continued our development of data solutions capabilities, by
expanding our software portfolio and service offerings, and
investing in cloud, SaaS and AI technologies.
“We are making excellent progress on integrating the highly
complementary OpenNMS business into our operations. OpenNMS
provides a number of cross marketing opportunities, by leveraging
NantHealth’s data science and AI competencies and OpenNMS’ network
monitoring solutions for critical data flows. In addition, we
believe the acquisition will drive opportunities to expand into
industries beyond healthcare and bring new sets of services to
customers of both entities.”
Software and Services Highlights:
- Clinical Decision Support (Eviti®):
- Expanded client-base and net new clients through NantHealth’s
Eviti channel partner, a leading clinical solutions provider
- Expanded Eviti Connect across the Medicaid population of a
leading U.S. health insurance company. Of the 13 states originally
announced, six states have gone live through the third quarter of
2020
- Payer Engagement (NaviNet®):
- We expanded API capabilities with a new service offering for
provider and revenue cycle organizations to connect with payers via
the NaviNet Open platform to conduct Eligibility & Benefits,
Claim Status Inquiry, Authorizations, and Referral
transactions
- Launched several user-centric enhancements that will provide a
richer user experience on NaviNet Open, including self-service
capability that allows NaviNet AllPayer subscribers to quickly and
easily configure provider information for registration and
access
- Network Monitoring (OpenNMS®):
- Released Meridian® 2020
- A Fortune 500 Healthcare IT company went into production with
the OpenNMS Architecture for Learning Enabled Correlation (ALEC) AI
engine
Business and Financial Highlights
For the 2020 third quarter:
- Total net revenue was $18.8 million compared with $18.6 million
in Q3 of 2019 and up from $17.6 million in Q2, 2020. Within total
revenue, there was $18.7 million of total software-related revenue,
compared with $18.3 in previous year
- Gross profit was $11.2 million, or 60% of total net revenue,
consistent with the prior year period
- Selling, general and administrative (SG&A) expenses
declined to $12.4 million from $13.7 million in 2019 third
quarter
- Research and development (R&D) expenses increased to $4.7
million from $3.3 million, primarily due to expanding our software
portfolio and service offerings, and investing in cloud, SaaS and
AI technologies
- Net loss from continuing operations attributable to NantHealth,
net of tax, narrowed to $11.0 million, or $0.10 per share from
$16.4 million, or $0.15 per share
- Non-GAAP net loss from continuing operations attributable to
NantHealth was $7.2 million, or $0.07 per share, compared with $7.5
million, or $0.07 per share, for the third quarter of last
year
- At September 30, 2020, cash and cash equivalents totaled $26
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
third quarter ended September 30, 2020. 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 9966656. 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 helps its 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 molecular analysis (GPS Cancer), payer/provider
collaboration platforms for real-time coverage decision support
(NaviNet and Eviti), and Data Products that provide multi-data
analysis, reporting and professional services offerings. 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.
NantHealth, Inc. Consolidated Balance Sheets (Dollars
in thousands)
September 30, 2020 December 31,
2019 (Unaudited) Assets Current assets Cash and
cash equivalents
$
25,908
$
5,243
Accounts receivable, net
4,195
6,179
Related party receivables, net
1,577
823
Prepaid expenses and other current assets
4,460
19,341
Current assets of discontinued operation
-
6,327
Total current assets
36,140
37,913
Property, plant, and equipment, net
14,232
14,985
Goodwill
98,333
97,307
Intangible assets, net
50,202
51,848
Investment in related party
-
31,702
Related party receivable, net of current
612
1,108
Operating lease right-of-use assets
7,604
8,470
Other assets
1,856
1,818
Noncurrent assets of discontinued operation
-
21,336
Total assets
$
208,979
$
266,487
Liabilities and Stockholders' Equity Current
liabilities Accounts payable
$
2,151
$
3,377
Accrued and other current liabilities
14,833
31,988
Deferred revenue
3,276
7,098
Related party payables, net
4,606
4,120
Notes payable
1,065
238
Current liabilities of discontinued operation
-
10,680
Total current liabilities
25,931
57,501
Deferred revenue, net of current
715
1,129
Related party liabilities
29,365
24,227
Related party promissory note
112,666
112,666
Related party convertible note, net
9,268
8,864
Convertible notes, net
89,023
84,648
Deferred income taxes, net
1,697
1,669
Operating lease liabilities
8,508
9,728
Other liabilities
24,135
21,542
Noncurrent liabilities of discontinued operation
-
1,649
Total liabilities
301,308
323,623
Stockholders' deficit Common stock, $0.0001 par value per
share, 750,000,000 shares authorized; 111,214,133 and 110,619,678
shares issued and outstanding at September 30, 2020 and December
31, 2019, respectively
11
11
Additional paid-in capital
890,590
889,955
Accumulated deficit
(983,108
)
(946,884
)
Accumulated other comprehensive loss
(283
)
(218
)
Total NantHealth stockholders' deficit
(92,790
)
(57,136
)
Noncontrolling interests
461
-
Total stockholders' deficit
(92,329
)
(57,136
)
Total liabilities and stockholders' deficit
$
208,979
$
266,487
NantHealth, Inc. Consolidated Statements of
Operations (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Revenue Software-as-a-service related
$
18,355
$
18,328
$
53,997
$
54,421
Maintenance
299
-
299
-
Professional services
62
-
62
-
Total software-related revenue
$
18,716
$
18,328
$
54,358
$
54,421
Sequencing and molecular analysis
49
276
172
1,581
Home health care services
-
-
-
2,863
Total net revenue
$
18,765
$
18,604
$
54,530
$
58,865
Cost of Revenue Software-as-a-service related
$
5,935
$
5,638
$
17,552
$
17,004
Maintenance
131
121
131
288
Professional services
15
-
15
-
Amortization of developed technologies
1,222
1,143
3,508
3,519
Total software-related cost of revenue
$
7,303
$
6,902
$
21,206
$
20,811
Sequencing and molecular analysis
216
462
827
4,066
Home health care services
-
-
-
1,471
Total cost of revenue
$
7,519
$
7,364
$
22,033
$
26,348
Gross Profit
$
11,246
$
11,240
$
32,497
$
32,517
Operating Expenses Selling, general and
administrative
12,442
13,708
36,864
42,843
Research and development
4,681
3,262
12,446
10,503
Amortization of acquisition-related assets
958
1,054
2,691
3,162
Impairment of intangible asset
-
-
-
3,977
Total operating expenses
$
18,081
$
18,024
$
52,001
$
60,485
Loss from operations
(6,835
)
(6,784
)
(19,504
)
(27,968
)
Interest expense, net
(4,861
)
(4,556
)
(14,291
)
(13,443
)
Other income (expense), net
747
(3,586
)
(2,550
)
(5,022
)
Loss from related party equity method investment
-
(1,983
)
(31,702
)
(6,401
)
Loss from continuing operations before income taxes
$
(10,949
)
$
(16,909
)
$
(68,047
)
$
(52,834
)
Provision for (benefit from) income taxes
77
(529
)
174
(659
)
Net loss from continuing operations
$
(11,026
)
$
(16,380
)
$
(68,221
)
$
(52,175
)
(Loss) income from discontinued operations, net of tax attributable
to NantHealth
(16
)
3
31,955
1,162
Net loss
$
(11,042
)
$
(16,377
)
$
(36,266
)
$
(51,013
)
Net loss attributable to noncontrolling interests
$
(42
)
-
(42
)
-
Net loss attributable to NantHealth
$
(11,000
)
$
(16,377
)
$
(36,224
)
$
(51,013
)
Basic and diluted net income (loss) per share
attributable to NantHealth: Continuing operations - common
stock
$
(0.10
)
$
(0.15
)
$
(0.62
)
$
(0.47
)
Discontinued operations - common stock
$
-
$
-
$
0.29
$
0.01
Total net loss per share - common stock
$
(0.10
)
$
(0.15
)
$
(0.33
)
$
(0.46
)
Weighted average shares outstanding Basic and diluted
- common stock
110,929,357
110,619,905
110,859,611
110,261,279
NantHealth, Inc. Non-GAAP Net Loss from Continuing
Operations Attributable to NantHealth andNon-GAAP Net Loss Per
Share from Continuing Operations Attributable to NantHealth
(Dollars in thousands, except per share amounts) (Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net loss from continuing operations attributable to NantHealth
$
(10,984
)
$
(16,380
)
$
(68,179
)
$
(52,175
)
Adjustments to GAAP net loss from continuing operations
attributable to NantHealth: Loss from related party equity method
investment
-
1,983
31,702
6,401
Stock-based compensation expense from continuing operations
633
521
1,761
1,797
Change in fair value of derivatives liability
(56
)
-
7
-
Change in fair value of Bookings Commitment
(657
)
3,159
3,070
4,664
Noncash interest expense related to convertible notes
1,644
1,446
4,779
4,207
Intangible amortization from continuing operations
2,165
2,197
6,184
6,681
Impairment of intangible asset
-
-
-
3,977
Loss on sale of business
-
-
-
582
Securities litigation costs
-
500
(103
)
500
Tax provision (benefit) resulting from certain noncash tax items
20
(885
)
(16
)
(519
)
Total adjustments to GAAP net loss from continuing operations
attributable to NantHealth
3,749
8,921
47,384
28,290
Net loss from continuing operations attributable to NantHealth -
Non-GAAP
$
(7,235
)
$
(7,459
)
$
(20,795
)
$
(23,885
)
Weighted average shares outstanding
110,929,357
110,619,905
110,859,611
110,261,279
Net loss per share from continuing operations
attributable to NantHealth - Non-GAAP
$
(0.07
)
$
(0.07
)
$
(0.19
)
$
(0.22
)
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 September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net loss per common share from continuing operations attributable
to NantHealth
$
(0.10
)
$
(0.15
)
$
(0.62
)
$
(0.47
)
Adjustments to GAAP net loss per common share from continuing
operations attributable to NantHealth: Loss from related party
equity method investment
-
0.03
0.28
0.04
Stock-based compensation expense from continuing operations
0.01
-
0.02
0.02
Change in fair value of derivatives liability
-
-
-
-
Change in fair value of Bookings Commitment
(0.01
)
0.03
0.03
0.04
Noncash interest expense related to convertible notes
0.01
0.01
0.04
0.04
Intangible amortization from continuing operations
0.02
0.02
0.06
0.06
Impairment of intangible asset
-
-
-
0.04
Loss on sale of business
-
-
-
0.01
Securities litigation costs
-
-
-
-
Tax provision (benefit) resulting from certain noncash tax items
-
(0.01
)
-
-
Total adjustments to GAAP net loss per common share from continuing
operations attributable to NantHealth
0.03
0.08
0.43
0.25
Net loss per common share from continuing operations
attributable to NantHealth - Non-GAAP
$
(0.07
)
$
(0.07
)
$
(0.19
)
$
(0.22
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105006175/en/
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com
424.288.4098
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