Second Quarter Revenue of $43.7 million, a 21% increase on a Sequential
Basis
Gross Margin Expanded to 51%, compared to
43% on a Sequential Basis
Nearly 50% of Transformation Initiatives
Completed To-Date
Subsequent to Quarter End, Company Under
New Leadership of CEO Samuel J.
Meckey
Announced $67.5M Convertible Debt Financing, Further
Extending Company's Maturity Profile
DELRAY
BEACH, Fla., Aug. 15, 2022 /PRNewswire/
-- UpHealth, Inc. ("UpHealth" or the "Company") (NYSE: UPH), a
global digital health company delivering technology platforms,
infrastructure, and services to modernize care delivery and health
management, today announced financial results for the second
quarter ended June 30, 2022.
UpHealth CEO Sam Meckey said, "I
joined UpHealth because the Company's assets are uniquely situated
within the healthcare ecosystem, to solve some of the most pressing
problems in healthcare today. The opportunities for UpHealth to
create value for our clients are significant and I am eager to
contribute my experience and knowledge in healthcare, to help drive
our future growth."
"I am pleased to say that with the company's strategies in place
and the foundation to support our transformation, we are well
positioned for long-term growth. Together, we look forward to
further implementing our strategic vision, uncovering additional
ways to unlock value, and delivering for all constituents of
UpHealth."
Meckey also said that he is focused on: "driving growth across
all verticals; delivering high-quality, predictable revenue
streams; conserving cash; and improving operational excellence, all
while creating a culture that attracts and retains top talent who
focus intensely on client needs and client service."
Second Quarter 2022 Financial Highlights:
- Revenue for the second quarter of 2022 was $43.7 million, a 37% increase compared to GAAP
revenue for the second quarter of 2021 of $31.9 million and an 11% increase compared to pro
forma revenue for the second quarter of 2021 of $39.2 million. Gross margin expanded to
51%, up from GAAP and pro forma gross margin in the second quarter
of 2021 of 36%.
- Revenue and gross margin by segment for the second quarter of
2022 were:
-
- Integrated Care Management generated $7.8 million of revenue (18% of total revenue)
with a gross margin of 88%.
- Virtual Care Infrastructure generated $16.8 million of revenue (39% of total revenue)
with a gross margin of 49%.
- Services generated $19.0 million
of revenue (44% of total revenue) with a gross margin of 38%.
- Operating loss for the second quarter of 2022 was $(10.0) million, a 72% improvement compared to
operating loss in the second quarter of 2021 of $(35.5) million.
- Adjusted EBITDA for the second quarter of 2022 was $4.0 million, compared to GAAP and pro forma
Adjusted EBITDA for the second quarter of 2021 of $2.2 million and $2.4
million, respectively.
Please refer to the discussion and tables under "Non-GAAP
Financial Information."
Year-to-Date Second Quarter 2022 Financial
Highlights:
- Year-to-date revenue for the second quarter of 2022 was
$79.6 million, a 78% increase
compared to year-to-date GAAP revenue for the second quarter of
2021 of $44.7 million and a 14%
increase compared to year-to-date pro forma revenue for the second
quarter of 2021 of $69.8
million. Year-to-date gross margin for the second
quarter of 2022 expanded to 47%, up from year-to-date GAAP and pro
forma gross margin for the second quarter of 2021 of 41% and 40%,
respectively.
- Year-to-date revenue and gross margin by segment for the second
quarter of 2022 were:
-
- Integrated Care Management generated $10.4 million of revenue (13% of total revenue)
with a gross margin of 82%.
- Virtual Care Infrastructure generated $32.4 million of revenue (41% of total revenue)
with a gross margin of 48%.
- Services generated $36.8 million
of revenue (46% of total revenue) with a gross margin of 37%.
- Year-to-date operating loss for the second quarter of 2022 was
$(28.0) million, a 27% improvement
compared to year-to-date operating loss for the second quarter of
2021 of $(38.3) million.
- Year-to-date Adjusted EBITDA for the second quarter of 2022 was
$2.6 million, compared to
year-to-date GAAP and pro forma Adjusted EBITDA for the second
quarter of 2021 of $2.9 million and
$5.4 million, respectively.
Please refer to the discussion and tables under "Non-GAAP
Financial Information."
Significant Second Quarter Business Highlights:
- 240 of the over 600 specific transformation milestones
completed as of quarter end, and an expectation to be at
approximately 80% completion by the end of the third quarter.
- Martti™ currently supports 224,000 encounters per month and
over 34,000 video endpoints at over 2,300 healthcare locations in
the U.S. During the second quarter, the Company closed 46 new
Martti™ contracts, with over 90 implementations in healthcare
facilities nationwide.
- Executed a contract extension and expansion with the L.A.
County Department of Mental Health, expanding UpHealth's work for
an additional 12 months, contributing $7.9
million to revenues.
- The Company recorded its largest volume of telehealth use ever
in the U.S. with over 10.6 million minutes of consultations in Q2,
compared to 9.4 million minutes in Q1 2022.
- HelloLyf consultations in India experienced growth of over 4x with
patient consultations increasing by 416K, from 115K in
Q2 2021 to 531K in Q2 2022.
- Finalized a contract with a hospital system to provide an
education program for their staff on providing health care for
minority populations with the goal of driving better outcomes,
reducing readmittance rates and reducing legal penalties for the
hospital.
- Announced the hiring of operations veteran, Daniel Mandoli, as Executive Vice President of
our Services Business. Operations optimizations are underway
across the pharmacy business.
- Subsequent to quarter end, the independent directors of
UpHealth welcomed the termination of litigation that delayed the
Annual Meeting of Stockholders. As a result of the termination of
the litigation, the Company will hold its Annual Meeting of
Stockholders as soon as practicable.
Convertible Debt Financing
The Company announced today the sale of $67.5 million in aggregate principal amount of a
new series of variable rate convertible senior secured notes due
December 15, 2025 (the "2025 Notes")
in a private placement transaction, raising approximately
$22.5 million in gross cash proceeds
after paying for a repurchase of $45.0
million of its 6.25% convertible senior notes due 2026. The
2025 Notes are convertible into shares of UpHealth common stock at
a conversion price of $1.75 per
share, which represents a 101% premium over the most recent closing
price of UpHealth's common stock.
The 2025 Notes will be senior secured obligations of UpHealth
and will accrue interest at a rate equal to the daily secured
overnight financing rate ("SOFR") plus 9.0% per annum, with a
minimum rate of 10.5% per annum, payable quarterly in arrears. The
2025 Notes will mature on December 15,
2025, unless earlier repurchased, redeemed or converted.
Holders will have the right to convert their 2025 Notes at any
time. UpHealth will settle conversions solely in shares of its
common stock, except for payments of cash in lieu of fractional
shares.
"We are pleased to announce this milestone transaction.
Importantly, the proceeds of this offering will be used to repay
the outstanding Seller Notes that mature on September 1, 2022, as well as provide us with the
liquidity to execute against our growth plans," commented
Martin Beck, CFO of UpHealth. "This
transaction provides us with more than three years until any
significant borrowings reach maturity, while maintaining the
Company's total leverage."
The 2025 Notes were offered in a private placement under Section
4(a)(2) of the Securities Act of 1933, as amended (the "Securities
Act"), and, along with the shares of common stock underlying the
2025 Notes, have not been registered under the Securities Act or
applicable state securities laws. Accordingly, the 2025 Notes and
the underlying shares of common stock may not be offered, sold,
pledged or otherwise transferred except to a qualified
institutional buyer (within the meaning Rule 144A under the
Securities Act) pursuant to an effective Securities Act
registration statement or an applicable exemption from the
registration requirements of the Securities Act and applicable
state securities laws.
Oppenheimer & Co Inc. served as exclusive placement agent
for the 2025 Notes.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state or
jurisdiction.
Balance Sheet and Cash Flow
At June 30, 2022, UpHealth
reported $41.1 million of cash, cash
equivalents and restricted cash. On April 9,
2022, the Company repaid its forward share purchase
agreement according to the terms of the contract.
Conference Call
UpHealth management will host a live question-and-answer session
with investors and analysts beginning at 8:30 a.m. Eastern Time today, August 15, 2022. The call can be accessed live
over the telephone by dialing (877) 344-8082, passcode 150118, from
the U.S. or International callers can dial (213) 992-4618, passcode
150118. There will also be a simultaneous, live webcast available
on the Investor Relations section of the Company's web site at
https://investors.uphealthinc.com/events-and-presentations/default.aspx or
directly here. The webcast will be archived for approximately 30
days.
About UpHealth, Inc.
UpHealth is a global digital health company that delivers
digital-first technology, infrastructure and services to
dramatically improve how healthcare is delivered and managed. The
UpHealth platform creates digitally enabled "care communities" that
improve access and achieve better patient outcomes at lower cost,
through digital health solutions and interoperability tools that
serve patients wherever they are, in their native language.
UpHealth's clients include global governments, health plans,
healthcare providers and community-based organizations. For more
information, please visit https://uphealthinc.com and follow us at
@UpHealthInc on Twitter and UpHealth Inc on LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. Such forward-looking
statements include, but are not limited to, the financial
statements of UpHealth, its product offerings and developments and
reception of its product by customers, statements regarding
payments pursuant to the terms of UpHealth's debt obligations and
the conversion or maturity of such debt and UpHealth's
expectations, hopes, beliefs, intentions, plans, prospects or
strategies regarding the future revenue and the business plans of
UpHealth's management team. Any statements contained herein that
are not statements of historical fact may be deemed to be
forward-looking statements. In addition, any statements that refer
to projections, forecasts, or other characterizations of future
events or circumstances, including any underlying assumptions, are
forward-looking statements. The words "anticipate," "believe,"
"continue," "could," "estimate," "expect," "intends," "may,"
"might," "plan," "possible," "potential," "predict," "project,"
"should," "would" and similar expressions may identify
forward-looking statements, but the absence of these words does not
mean that a statement is not forward-looking. The forward-looking
statements contained in this press release are based on certain
assumptions and analyses made by the management of UpHealth in
light of their respective experience and perception of historical
trends, current conditions, and expected future developments and
their potential effects on UpHealth as well as other factors they
believe are appropriate in the circumstances. There can be no
assurance that future developments affecting UpHealth will be those
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond the control of the
parties), or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements, including the ability
of UpHealth to service or otherwise pay its debt obligations, the
mix of services utilized by UpHealth's customers and such
customers' needs for these services, market acceptance of new
service offerings, the ability of UpHealth to expand what it does
for existing customers as well as to add new customers, that
UpHealth will have sufficient capital to operate as anticipated,
and the impact that the novel coronavirus and the illness,
COVID-19, that it causes, as well as government responses to deal
with the spread of this illness and the reopening of economies that
have been closed as part of these responses, may have on UpHealth's
operations, the demand for UpHealth's products, global supply
chains and economic activity in general. Should one or more of
these risks or uncertainties materialize or should any of the
assumptions being made prove incorrect, actual results may vary in
material respects from those projected in these forward-looking
statements. We undertake no obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, except as may be required under
applicable securities laws.
Investor Relations:
Shannon Devine (MZ North
America)
Managing Director
203-741-8811
UPH@mzgroup.us
Media Inquiries:
Kelsie
Aziz (Ketchum)
Vice President, Financial Communications
972-408-7103
kelsie.aziz@Ketchum.com
UPHEALTH,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In thousands,
except per share amounts, unaudited)
|
|
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
40,629
|
|
$
58,192
|
Restricted
cash
|
508
|
|
18,609
|
Accounts receivable,
net
|
28,658
|
|
22,761
|
Inventories
|
2,966
|
|
2,928
|
Due from related
parties
|
31
|
|
40
|
Prepaid expenses and
other current assets
|
3,785
|
|
4,217
|
Total current
assets
|
76,577
|
|
106,747
|
Property and equipment,
net
|
46,126
|
|
56,072
|
Intangible assets,
net
|
110,563
|
|
115,313
|
Goodwill
|
284,177
|
|
284,268
|
Other assets
|
2,768
|
|
6,907
|
Total
assets
|
$
520,211
|
|
$
569,307
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
18,160
|
|
$
13,604
|
Accrued
expenses
|
40,065
|
|
36,084
|
Deferred
revenue
|
6,452
|
|
2,649
|
Due to related
party
|
458
|
|
47
|
Income taxes
payable
|
2,731
|
|
739
|
Related-party
long-term debt, current
|
466
|
|
657
|
Long-term debt,
current
|
18,827
|
|
22,093
|
Forward share purchase
liability
|
—
|
|
18,051
|
Other current
liabilities
|
3,069
|
|
2,780
|
Total current
liabilities
|
90,228
|
|
96,704
|
Related-party long-term
debt, noncurrent
|
336
|
|
331
|
Long-term debt,
noncurrent
|
105,243
|
|
98,417
|
Deferred tax
liabilities
|
19,181
|
|
28,281
|
Warrant liabilities,
noncurrent
|
61
|
|
252
|
Derivative liability,
noncurrent
|
1,307
|
|
7,977
|
Other long-term
liabilities
|
2,971
|
|
3,502
|
Total
liabilities
|
219,327
|
|
235,464
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Common stock
|
15
|
|
14
|
Additional paid-in
capital
|
683,697
|
|
665,461
|
Treasury stock, at
cost
|
(17,000)
|
|
—
|
Accumulated
deficit
|
(373,092)
|
|
(343,209)
|
Accumulated other
comprehensive loss
|
(7,659)
|
|
(3,802)
|
Total UpHealth, Inc.,
stockholders' equity
|
285,961
|
|
318,464
|
Noncontrolling
interests
|
14,923
|
|
15,379
|
Total stockholders'
equity
|
300,884
|
|
333,843
|
Total liabilities and
stockholders' equity
|
$
520,211
|
|
$
569,307
|
UPHEALTH,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share amounts, unaudited)
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue:
|
|
|
|
|
|
|
|
Services
|
$
28,096
|
|
$
15,448
|
|
$
53,782
|
|
$
23,586
|
Licenses and
subscriptions
|
6,812
|
|
9,145
|
|
8,593
|
|
12,803
|
Products
|
8,760
|
|
7,289
|
|
17,265
|
|
8,309
|
Total
revenue
|
43,668
|
|
31,882
|
|
79,640
|
|
44,698
|
Cost of goods and
services:
|
|
|
|
|
|
|
|
Services
|
14,762
|
|
9,590
|
|
29,207
|
|
14,063
|
License and
subscriptions
|
217
|
|
6,173
|
|
450
|
|
6,670
|
Products
|
6,296
|
|
4,727
|
|
12,286
|
|
5,643
|
Total cost of goods
and services
|
21,275
|
|
20,490
|
|
41,943
|
|
26,376
|
Gross
margin
|
22,393
|
|
11,392
|
|
37,697
|
|
18,322
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales and
marketing
|
3,486
|
|
1,695
|
|
6,212
|
|
2,580
|
Research and
development
|
1,782
|
|
2,273
|
|
3,369
|
|
3,843
|
General and
administrative
|
14,632
|
|
7,306
|
|
28,291
|
|
11,029
|
Depreciation and
amortization
|
4,700
|
|
2,966
|
|
9,936
|
|
3,870
|
Stock-based
compensation
|
1,088
|
|
—
|
|
2,462
|
|
—
|
Lease abandonment
expenses
|
—
|
|
—
|
|
75
|
|
—
|
Goodwill and
intangible asset impairment
|
—
|
|
—
|
|
6,174
|
|
—
|
Acquisition,
integration, and transformation costs
|
6,749
|
|
32,653
|
|
9,133
|
|
35,339
|
Total operating
expenses
|
32,437
|
|
46,893
|
|
65,652
|
|
56,661
|
Loss from
operations
|
(10,044)
|
|
(35,501)
|
|
(27,955)
|
|
(38,339)
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
expense
|
(6,603)
|
|
(4,904)
|
|
(13,598)
|
|
(5,615)
|
Gain on consolidation
of equity method investment
|
—
|
|
—
|
|
—
|
|
640
|
Gain on fair value of
derivative liability
|
1,841
|
|
—
|
|
6,670
|
|
—
|
Gain on fair value of
warrant liabilities
|
95
|
|
1,075
|
|
190
|
|
1,075
|
Gain on extinguishment
of debt
|
—
|
|
151
|
|
—
|
|
151
|
Other income
(expense), net, including interest income
|
14
|
|
(256)
|
|
(2)
|
|
(219)
|
Total other
expense
|
(4,653)
|
|
(3,934)
|
|
(6,740)
|
|
(3,968)
|
Loss before income tax
benefit
|
(14,697)
|
|
(39,435)
|
|
(34,695)
|
|
(42,307)
|
Income tax
benefit
|
2,232
|
|
6,646
|
|
4,525
|
|
7,052
|
Net loss before loss
from equity method investment
|
(12,465)
|
|
(32,789)
|
|
(30,170)
|
|
(35,255)
|
Loss from equity method
investment
|
—
|
|
—
|
|
—
|
|
(561)
|
Net loss
|
(12,465)
|
|
(32,789)
|
|
(30,170)
|
|
(35,816)
|
Less: net loss
attributable to noncontrolling interests
|
(27)
|
|
(6)
|
|
(287)
|
|
(84)
|
Net loss attributable
to UpHealth, Inc.
|
$
(12,438)
|
|
$
(32,783)
|
|
$
(29,883)
|
|
$
(35,732)
|
Net loss per share
attributable to UpHealth, Inc.:
|
|
|
|
|
|
|
|
Basic
|
$
(0.09)
|
|
$
(0.35)
|
|
$
(0.21)
|
|
$
(0.43)
|
Diluted
|
$
(0.09)
|
|
$
(0.35)
|
|
$
(0.21)
|
|
$
(0.43)
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
Basic
|
144,624
|
|
94,170
|
|
144,581
|
|
83,585
|
Diluted
|
144,624
|
|
94,170
|
|
144,581
|
|
83,585
|
UPHEALTH,
INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In thousands,
unaudited)
|
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
Operating
activities:
|
|
|
|
Net loss
|
$
(30,170)
|
|
$
(35,816)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Depreciation and
amortization
|
12,725
|
|
4,353
|
Amortization of debt
issuance costs and discount on convertible debt
|
6,969
|
|
1,913
|
Stock-based
compensation
|
2,462
|
|
—
|
Provision for bad debt
expense
|
(37)
|
|
—
|
Impairment of
property, plant and equipment, intangible assets and
goodwill
|
5,459
|
|
—
|
Gain on extinguishment
of debt
|
—
|
|
(151)
|
Loss from equity
method investment
|
—
|
|
561
|
Gain on consolidation
of equity method investment
|
—
|
|
(640)
|
Gain on fair value of
warrant liabilities
|
(190)
|
|
(1,075)
|
Gain on fair value of
convertible derivative
|
(6,670)
|
|
—
|
Loss on disposal of
property and equipment
|
—
|
|
78
|
Deferred income
taxes
|
(4,596)
|
|
(7,262)
|
Other
|
—
|
|
(271)
|
Changes in operating
assets and liabilities, net of effects of acquisitions:
|
|
|
|
Accounts
receivable
|
(6,151)
|
|
(21,000)
|
Inventories
|
(55)
|
|
(80)
|
Prepaid expenses and
other current assets
|
540
|
|
5
|
Accounts payable and
accrued expenses
|
7,913
|
|
15,573
|
Income taxes
payable
|
264
|
|
200
|
Deferred
revenue
|
3,838
|
|
5,877
|
Proceeds from Provider
Relief Funds
|
—
|
|
506
|
Due to related
parties
|
170
|
|
28
|
Other current
liabilities
|
(312)
|
|
(27)
|
Net cash used in
operating activities
|
(7,841)
|
|
(37,228)
|
Investing
activities:
|
|
|
|
Purchases of property
and equipment
|
(3,783)
|
|
(669)
|
Due to related
parties
|
—
|
|
265
|
Net cash acquired in
acquisition of businesses
|
—
|
|
4,263
|
Net cash (used in)
provided by investing activities
|
(3,783)
|
|
3,859
|
Financing
activities:
|
|
|
|
Proceeds from merger
and recapitalization transaction
|
—
|
|
83,435
|
Proceeds from
convertible debt
|
—
|
|
164,500
|
Repayments of
debt
|
(3,234)
|
|
(17,333)
|
Payments of debt
issuance costs
|
—
|
|
(8,100)
|
Repayment of forward
share purchase
|
(18,521)
|
|
—
|
Payments of seller
notes
|
—
|
|
(88,056)
|
Payments of capital
lease obligations
|
(1,619)
|
|
(275)
|
Payments for taxes
related to net settlement of equity awards
|
(67)
|
|
—
|
Distribution to
noncontrolling interest
|
(139)
|
|
(100)
|
Payments of amount due
to member
|
—
|
|
(4,270)
|
Net cash (used in)
provided by financing activities
|
(23,580)
|
|
129,801
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
(460)
|
|
(99)
|
Net (decrease)
increase in cash, cash equivalents, and restricted
cash
|
(35,664)
|
|
96,333
|
Cash, cash
equivalents, and restricted cash, beginning of
period
|
76,801
|
|
2,369
|
Cash, cash
equivalents, and restricted cash, end of period
|
$
41,137
|
|
$
98,702
|
UPHEALTH, INC.
NON-GAAP FINANCIAL
INFORMATION
Non-GAAP Financial Information
This press release includes financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles (GAAP). To supplement UpHealth's condensed consolidated
financial statements presented in accordance with GAAP, UpHealth
presents investors with non-GAAP financial measures, including pro
forma revenue, pro forma gross margin and adjusted EBITDA.
- Pro forma revenue consists of GAAP revenue and revenue from
UpHealth's subsidiaries prior to their acquisition.
- Pro forma gross margin consists of GAAP gross margin and gross
margin from UpHealth's subsidiaries prior to their acquisition.
- Adjusted EBITDA consists of net income (loss) attributable to
UpHealth, Inc., excluding depreciation and amortization;
stock-based compensation; lease abandonment expenses;
goodwill/intangible asset impairment; acquisition, integration, and
transformation costs; other income (expense); income tax benefit
(expense); income (loss) from equity method investment; net income
(loss) attributable to noncontrolling interests; and other
non-recurring charges to GAAP net income (loss) attributable to
UpHealth, Inc. Other non-recurring charges to GAAP net income
(loss) attributable to UpHealth, Inc. may include transaction
expenses in connection with capital raising transactions (whether
debt, equity or equity-linked) and acquisitions, whether or not
consummated, purchase price adjustments, the cumulative effect of a
change in accounting principles, or other expenses determined to be
non-recurring.
UpHealth believes that the presentation of these non-GAAP
financial measures provides important supplemental information to
management and investors regarding financial and business trends
relating to UpHealth's financial condition and results of
operations. Management believes that the items described above
provide an additional measure of UpHealth's operating results and
facilitates comparisons of UpHealth's core operating performance
against prior periods and business model objectives. This
information is provided to investors in order to facilitate
additional analyses of past, present, and future operating
performance and as a supplemental means to evaluate UpHealth's
ongoing operations. UpHealth believes that these non-GAAP financial
measures are useful to investors in their assessment of UpHealth's
operating performance.
Pro forma revenue, pro forma gross margin and adjusted EBITDA
are not calculated in accordance with GAAP, and should be
considered supplemental to, and not as a substitute for, or
superior to, financial measures calculated in accordance with GAAP.
You should not consider these measures in isolation or as a
substitute for analysis of UpHealth's results as reported under
GAAP. UpHealth compensates for these limitations by prominently
disclosing GAAP financial measures and providing investors with
reconciliations from UpHealth's GAAP operating results to the
non-GAAP financial measures for the relevant periods.
The accompanying tables provide more details on the GAAP
financial measures that are most directly comparable to the
non-GAAP financial measures described above and the related
reconciliations between these financial measures.
UPHEALTH,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (1)
|
(In
thousands)
|
|
|
Three Months Ended
June 30, 2022
|
|
GAAP
|
Revenue
|
$
43,668
|
|
|
Gross margin
|
51 %
|
|
|
Net loss attributable
to UpHealth, Inc.
|
$
(12,438)
|
Net loss attributable
to noncontrolling interests
|
(27)
|
Net loss
|
(12,465)
|
Other
expense
|
4,653
|
Income tax
benefit
|
(2,232)
|
Loss from equity
method investment
|
—
|
Loss from
operations
|
(10,044)
|
Depreciation and
amortization
|
6,161
|
Stock-based
compensation
|
1,088
|
Acquisition,
integration and transformation costs, and non-recurring expenses
(2)
|
6,749
|
Adjusted
EBITDA
|
$
3,954
|
(1) See Non-GAAP
Financial Information section for definitions of our non-GAAP
financial measures.
|
(2) Amounts reflect
acquisition, integration and transformation costs from the
condensed consolidated statements of operations, as well as other
operating expenses considered to be non-recurring during the
period.
|
|
Three Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Revenue
|
$
31,882
|
|
$
7,290
|
|
$
39,172
|
|
|
|
|
|
|
Gross margin
|
36 %
|
|
36 %
|
|
36 %
|
|
|
|
|
|
|
Net loss attributable
to UpHealth, Inc.
|
$
(32,783)
|
|
$
(3,394)
|
|
$
(36,177)
|
Net loss attributable
to noncontrolling interests
|
(6)
|
|
6
|
|
—
|
Net loss
|
(32,789)
|
|
(3,388)
|
|
(36,177)
|
Other
expense
|
3,934
|
|
(1,180)
|
|
2,754
|
Income tax
benefit
|
(6,646)
|
|
—
|
|
(6,646)
|
Loss from equity
method investment
|
—
|
|
—
|
|
—
|
Loss from
operations
|
(35,501)
|
|
(4,568)
|
|
(40,069)
|
Depreciation and
amortization
|
3,570
|
|
892
|
|
4,462
|
Acquisition,
integration and transformation costs, and non-recurring expenses
(4)
|
34,086
|
|
3,895
|
|
37,981
|
Adjusted
EBITDA
|
$
2,155
|
|
$
219
|
|
$
2,374
|
|
|
|
|
|
|
(1) See Non-GAAP
Financial Information section for definitions of our non-GAAP
financial measures.
|
(2) Amounts reflect
operating activity of UpHealth and subsidiaries during the period
prior to each subsidiary's acquisition date, if acquired during the
period.
|
(3) Amounts reflect
operating activity of UpHealth and subsidiaries during the period,
as if acquired at the beginning of the period.
|
(4) Amounts reflect
acquisition, integration and transformation costs from the
condensed consolidated statements of operations, as well as other
operating expenses considered to be non-recurring during the
period.
|
UPHEALTH,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (1)
|
(In
thousands)
|
|
|
Six Months Ended
June 30, 2022
|
|
GAAP
|
Revenue
|
$
79,640
|
|
|
Gross margin
|
47 %
|
|
|
Net loss attributable
to UpHealth, Inc.
|
$
(29,883)
|
Net loss attributable
to noncontrolling interests
|
(287)
|
Net loss
|
(30,170)
|
Other
expense
|
6,740
|
Income tax
benefit
|
(4,525)
|
Loss from equity
method investment
|
—
|
Loss from
operations
|
(27,955)
|
Depreciation and
amortization
|
12,760
|
Stock-based
compensation
|
2,462
|
Acquisition,
integration and transformation costs, lease abandonment expenses,
goodwill and intangible asset impairment, and non-recurring
expenses (2)
|
15,382
|
Adjusted
EBITDA
|
$
2,649
|
(1) See Non-GAAP
Financial Information section for definitions of our non-GAAP
financial measures.
|
(2) Amounts reflect
acquisition, integration and transformation costs, lease
abandonment expenses, and goodwill and intangible asset impairment
from the condensed consolidated statements of operations, as well
as other operating expenses considered to be non-recurring during
the period.
|
|
Six Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Revenue
|
$
44,698
|
|
$
25,082
|
|
$
69,780
|
|
|
|
|
|
|
Gross margin
|
41 %
|
|
37 %
|
|
40 %
|
|
|
|
|
|
|
Net loss attributable
to UpHealth, Inc.
|
$
(35,732)
|
|
$
(4,317)
|
|
$
(40,049)
|
Net loss attributable
to noncontrolling interests
|
(84)
|
|
28
|
|
(56)
|
Net loss
|
(35,816)
|
|
(4,289)
|
|
(40,105)
|
Other
expense
|
3,968
|
|
(1,171)
|
|
2,797
|
Income tax
benefit
|
(7,052)
|
|
(99)
|
|
(7,151)
|
Loss from equity
method investment
|
561
|
|
—
|
|
561
|
Loss from
operations
|
(38,339)
|
|
(5,559)
|
|
(43,898)
|
Depreciation and
amortization
|
4,492
|
|
2,729
|
|
7,221
|
Acquisition,
integration and transformation costs, and non-recurring expenses
(4)
|
36,772
|
|
5,302
|
|
42,074
|
Adjusted
EBITDA
|
$
2,925
|
|
$
2,472
|
|
$
5,397
|
|
|
|
|
|
|
(1) See Non-GAAP
Financial Information section for definitions of our non-GAAP
financial measures.
|
(2) Amounts reflect
operating activity of UpHealth and subsidiaries during the period
prior to each subsidiary's acquisition date, if acquired during the
period.
|
(3) Amounts reflect
operating activity of UpHealth and subsidiaries during the period,
as if acquired at the beginning of the period.
|
(4) Amounts reflect
acquisition, integration and transformation costs from the
condensed consolidated statements of operations, as well as other
operating expenses considered to be non-recurring during the
period.
|
UPHEALTH,
INC.
|
SEGMENT INFORMATION
AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1)
|
(In thousands,
unaudited)
|
|
|
Three Months Ended
June 30, 2022
|
|
GAAP
|
Revenue:
|
|
Integrated care
management (4)
|
$
7,823
|
Virtual care
infrastructure (5)
|
16,815
|
Services
(6)
|
19,030
|
Total
|
$
43,668
|
|
|
|
Three Months Ended
June 30, 2022
|
|
GAAP
|
Gross
Margin:
|
|
Integrated care
management (4)
|
$
6,894
|
Virtual care
infrastructure (5)
|
8,179
|
Services
(6)
|
7,320
|
Total
|
$
22,393
|
|
|
|
Three Months Ended
June 30, 2022
|
|
GAAP
|
Gross Margin
%:
|
|
Integrated care
management (4)
|
88 %
|
Virtual care
infrastructure (5)
|
49 %
|
Services
(6)
|
38 %
|
Total
|
51 %
|
|
|
|
Three Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Revenue:
|
|
|
|
|
|
Integrated care
management (4)
|
$
11,280
|
|
$
—
|
|
$
11,280
|
Virtual care
infrastructure (5)
|
6,964
|
|
5,394
|
|
12,358
|
Services
(6)
|
13,638
|
|
1,896
|
|
15,534
|
Total
|
$
31,882
|
|
$
7,290
|
|
$
39,172
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Gross
Margin:
|
|
|
|
|
|
Integrated care
management (4)
|
$
4,504
|
|
$
—
|
|
$
4,504
|
Virtual care
infrastructure (5)
|
2,634
|
|
1,903
|
|
4,537
|
Services
(6)
|
4,254
|
|
750
|
|
5,004
|
Total
|
$
11,392
|
|
$
2,653
|
|
$
14,045
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Gross Margin
%:
|
|
|
|
|
|
Integrated care
management (4)
|
40 %
|
|
n/a
|
|
40 %
|
Virtual care
infrastructure (5)
|
38 %
|
|
35 %
|
|
37 %
|
Services
(6)
|
31 %
|
|
40 %
|
|
32 %
|
Total
|
36 %
|
|
36 %
|
|
36 %
|
|
|
|
|
|
|
UPHEALTH,
INC.
|
SEGMENT INFORMATION
AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1)
|
(In thousands,
unaudited)
|
|
|
Six Months Ended
June 30, 2022
|
|
GAAP
|
|
Revenue:
|
|
|
Integrated care
management (4)
|
$
10,435
|
|
Virtual care
infrastructure (5)
|
32,445
|
|
Services
(6)
|
36,760
|
|
Total
|
$
79,640
|
|
|
|
|
|
Six Months Ended
June 30, 2022
|
|
GAAP
|
|
Gross
Margin:
|
|
|
Integrated care
management (4)
|
$
8,531
|
|
Virtual care
infrastructure (5)
|
15,588
|
|
Services
(6)
|
13,578
|
|
Total
|
$
37,697
|
|
|
|
|
|
Six Months Ended
June 30, 2022
|
|
GAAP
|
|
Gross Margin
%:
|
|
|
Integrated care
management (4)
|
82 %
|
|
Virtual care
infrastructure (5)
|
48 %
|
|
Services
(6)
|
37 %
|
|
Total
|
47 %
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Revenue:
|
|
|
|
|
|
Integrated care
management (4)
|
$
17,569
|
|
$
—
|
|
$
17,569
|
Virtual care
infrastructure (5)
|
7,554
|
|
15,603
|
|
23,157
|
Services
(6)
|
19,575
|
|
9,479
|
|
29,054
|
Total
|
$
44,698
|
|
$
25,082
|
|
$
69,780
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Gross
Margin:
|
|
|
|
|
|
Integrated care
management (4)
|
$
9,723
|
|
$
—
|
|
$
9,723
|
Virtual care
infrastructure (5)
|
2,933
|
|
6,097
|
|
9,030
|
Services
(6)
|
5,666
|
|
3,157
|
|
8,823
|
Total
|
$
18,322
|
|
$
9,254
|
|
$
27,576
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Gross Margin
%:
|
|
|
|
|
|
Integrated care
management (4)
|
55 %
|
|
n/a
|
|
55 %
|
Virtual care
infrastructure (5)
|
39 %
|
|
39 %
|
|
39 %
|
Services
(6)
|
29 %
|
|
33 %
|
|
30 %
|
Total
|
41 %
|
|
37 %
|
|
40 %
|
|
|
|
|
|
|
UPHEALTH, INC.
SEGMENT INFORMATION
AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1)
(In thousands, unaudited)
|
|
(1)
|
See Non-GAAP Financial
Information section for definitions of our non-GAAP financial
measures.
|
|
|
(2)
|
Amounts reflect
operating activity of UpHealth and subsidiaries during the period
prior to each subsidiary's' acquisition date, if acquired during
the period.
|
|
|
(3)
|
Amounts reflect
operating activity of UpHealth and subsidiaries during the period,
as if acquired at the beginning of the period.
Segment
Information
Our business is
organized into three operating business segments:
Integrated Care
Management—through our Thrasys subsidiary;
Virtual Care
Infrastructure—through our Glocal and Cloudbreak subsidiaries;
and
Services—through our
Innovations, BHS and TTC subsidiaries.
The reportable segments
are consistent with how management views our services and products
and the financial information reviewed by the chief operating
decision makers. We manage our businesses as components of an
enterprise for which separate information is available and is
evaluated regularly by the chief operating decision makers in
deciding how to allocate resources and assess
performance.
|
|
|
(4)
|
In the Integrated Care
Management segment, we provide our customers with an advanced,
comprehensive, and extensible technology platform, marketed under
the umbrella "SyntraNetTM" to manage health, quality of care, and
costs, especially for individuals with complex medical, behavioral
health, and social needs.
|
|
|
(5)
|
In the Virtual Care
Infrastructure segment, we provide technology and process-based
healthcare platforms providing our customers comprehensive primary
care, specialty consultations, and translation services, through
telemedicine, Digital Dispensaries, and technology-based hospital
centers.
|
|
|
(6)
|
In the Services
segment, we provide custom compounded medications for the unique
needs of every patient and prescriber. We are a full-service
pharmacy filling prescriptions from our inventory of compounded
medications, as well as drugs purchased from manufacturers.
Additionally, we provide inpatient and outpatient substance abuse
and mental health treatment services for individuals with drug and
alcohol addiction and other behavioral health issues. We offer a
complete continuum of care from detoxification services,
residential care, partial hospitalization programs, and intensive
outpatient and outpatient programs.
|
|
|
View original content to download
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SOURCE UpHealth, Inc.