MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”) a
technology-enabled pharmacy company, today reported financial
results for the three months ended September 30, 2022.
“During the third quarter, we made significant progress on our
key milestones – we achieved and exceeded our target of 100
dispensing MedCenters, delivered gross margin expansion for the
second consecutive quarter, and reached savings of 26% on our cash
burn rate over the fourth quarter of 2021. We are also pleased with
our third quarter performance; despite some headwinds, we continued
to meaningfully broaden our retail pharmacy footprint and continued
to expand our technology pipeline,” said Mark Doerr, chief
executive officer of MedAvail. Looking ahead to the remainder of
2022 and beyond, we are confident that we are well positioned with
a clear pathway to deliver long-term profitable growth, as we
continue our focus and strong execution across our strategic
priorities.”
Recent Operational
Highlights
- Ended third quarter of 2022 with
104 MedCenter total net cumulative deployments, a 28% increase year
to date
- Ended third quarter of 2022 with
103 MedCenter total net dispensing deployments, a 52% increase year
to date
- Expanded partnership with Cano
Health to open nine additional SpotRx locations in South
Florida
- Entered into a new scalable
agreement with Aegis to open one initial SpotRx in Orlando
- Announced that PharmCo Rx Pharmacy
plans to implement five MedCenters in Florida under a technology
agreement with MedAvail
- Ended third quarter with 11.3%
gross margins, an improvement from 8.2% during the second quarter,
continuing consecutive quarter over quarter margin expansion
- Achieved in the third quarter
savings of 26% over the cash burn rate in the fourth quarter of
2021
- Achieved pharmacy operating costs
savings of 10%, excluding increased non-cash accelerated
amortization expense, as compared to the same prior year
period
Third Quarter 2022 and Recent Financial
HighlightsAll comparisons, unless otherwise noted, are to
the three months ended September 30, 2021.
- Total revenue increased 98% to
$11.5 million
- Total revenue by segment
- Retail Pharmacy Services revenue
increased 105% to $11.2 million
- Pharmacy Technology revenue
remained unchanged at $0.3 million
- Net operating loss was $11.8
million compared to $11.3 million
- Adjusted EBITDA loss of $9.4
million compared to $10.1 million
- Cash and cash equivalents as of
September 30, 2022, were $27.2 million
Full Year 2022 Financial
OutlookMedAvail expects total revenue for full year 2022
to be at least $42 million, representing growth of at least 90%
over full year 2021 revenue.
The company is raising guidance of 30 to 35 net
new dispensing deployments for full year 2022 to at least 40 net
new dispensing deployments.
Conference CallMedAvail will
host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Thursday,
November 10, 2022, to discuss its third quarter 2022 financial
results. The conference call can be accessed by registering online
for the live audio webcast on the “Investor Relations” section
of MedAvail’s website at: https://investors.medavail.com. The
webcast will be archived and available for replay after the
event.
Definition of Key Metrics Net
Dispensing Deployments
We define net dispensing deployments as sites
that are live, meaning that such sites have payer network
acceptance, pharmacy board approvals and trained clinical staff or
clinical account managers.
Net Cumulative DeploymentsNet cumulative
deployments includes dispensing deployments and installed not yet
dispensing deployments, but excludes decommissioned clinics, pilots
and demo sites.
About MedAvailMedAvail
Holdings, Inc. (NASDAQ: MDVL) is a technology-enabled pharmacy
company, providing turnkey in-clinic pharmacy services through its
proprietary robotic dispensing platform, the MedAvail MedCenter,
and home delivery operations, to Medicare clinics. MedAvail helps
patients to optimize drug adherence, resulting in better health
outcomes. Learn more at www.medavail.com.
Non-GAAP Financial
MeasuresMedAvail refers to certain financial measures that
are not recognized under U.S. generally accepted accounting
principles ("GAAP") in this press release, including adjusted
EBITDA. See the schedules to this press release for additional
information and reconciliations of such non-GAAP financial
measures.
Forward Looking Statements
Certain statements included in this press release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would,"
"plan," "predict," "potential," "seem," "seek," "future,"
"outlook," "project," 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 MedAvail's business
strategy and market opportunity; potential future revenue and cost
savings projections and expectations for growth and profitability;
customer demand and expansion plans; margin, utilization and cost
reduction improvements; improvements in deployment efficiency and
speed; and customer partnerships. These statements are based on
various assumptions, whether or not identified in this press
release, and on the current expectations of MedAvail's management
and are not predictions of actual performance. Forward-looking
statements are subject to a number of risks and uncertainties that
could cause actual results to differ materially from the
forward-looking statements, including but not limited to risks
discussed under the heading "Risk Factors" in MedAvail’s Annual
Report on Form 10-K for the year ended December 31, 2021, filed
with the Securities and Exchange Commission (“SEC”) on March 29,
2022, MedAvail’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2022, filed with the SEC on November 10, 2022,
and other filings MedAvail makes with the SEC in the future.
Additional information is also set forth in MedAvail’s Annual
Report on Form 10-K for the year ended December 31, 2021,
MedAvail’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2022, and other filings MedAvail makes with the SEC in the
future. If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. These forward-looking
statements speak only as of the date hereof and MedAvail
specifically disclaims any obligation to update these
forward-looking statements.
Contacts:
Investor RelationsJi-Yon YiGilmartin Groupir@medavail.com
SOURCE MedAvail Holdings, Inc.
MEDAVAIL HOLDINGS, INC.
Condensed Consolidated Statements of Operations(in
thousands, except share and per share data)(Unaudited)
|
Three Months Ended September 30, |
|
2022 |
|
2021(1) |
Revenue: |
|
|
|
Pharmacy and hardware revenue |
$ |
11,266 |
|
|
$ |
5,659 |
|
Service revenue |
|
195 |
|
|
|
133 |
|
Total revenue |
|
11,461 |
|
|
|
5,792 |
|
Cost of products sold and
services: |
|
|
|
Pharmacy and hardware cost of products sold |
|
10,113 |
|
|
|
5,539 |
|
Service costs |
|
56 |
|
|
|
67 |
|
Total cost of products sold
and services |
|
10,169 |
|
|
|
5,606 |
|
Operating expense: |
|
|
|
Pharmacy operations |
|
4,392 |
|
|
|
3,750 |
|
General and administrative |
|
6,087 |
|
|
|
5,320 |
|
Selling and marketing |
|
2,126 |
|
|
|
1,909 |
|
Research and development |
|
178 |
|
|
|
232 |
|
Total operating expense |
|
12,783 |
|
|
|
11,211 |
|
Operating loss |
|
(11,491 |
) |
|
|
(11,025 |
) |
Other gain (loss), net |
|
— |
|
|
|
7 |
|
Interest income |
|
— |
|
|
|
7 |
|
Interest expense |
|
(315 |
) |
|
|
(260 |
) |
Loss before income taxes |
|
(11,806 |
) |
|
|
(11,271 |
) |
Income tax expense |
|
— |
|
|
|
(2 |
) |
Net loss and comprehensive
loss |
$ |
(11,806 |
) |
|
$ |
(11,273 |
) |
Net loss per share - basic and
diluted |
$ |
(0.15 |
) |
|
$ |
(0.34 |
) |
Weighted average shares
outstanding - basic and diluted |
|
80,045,995 |
|
|
|
32,750,831 |
|
(1) Certain activity was reclassified to be
consistent with the current presentation, see comparative tables
that follow.
MEDAVAIL HOLDINGS, INC.
Operating Expense Reclassifications (in
thousands)(Unaudited)
|
Three Months Ended September 30, 2021 |
|
|
|
Current presentation |
|
As previously reported |
|
Change |
Pharmacy operations |
$ |
3,750 |
|
$ |
2,395 |
|
$ |
1,355 |
|
General and
administrative |
|
5,320 |
|
|
6,805 |
|
|
(1,485 |
) |
Selling and marketing |
|
1,909 |
|
|
1,779 |
|
|
130 |
|
|
$ |
10,979 |
|
$ |
10,979 |
|
$ |
— |
|
MEDAVAIL HOLDINGS, INC.
Condensed Consolidated Balance Sheets (in
thousands, except share and per share amounts)
|
September 30, |
|
December 31, |
|
2022 |
|
2021 |
|
|
|
|
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
27,196 |
|
|
$ |
19,689 |
|
Restricted cash |
|
676 |
|
|
|
400 |
|
Accounts receivable (net of allowance for doubtful accounts of $186
thousand for September 30, 2022, $66 thousand for December 31,
2021) |
|
2,262 |
|
|
|
1,189 |
|
Inventories |
|
6,401 |
|
|
|
3,916 |
|
Prepaid expenses and other current assets |
|
2,863 |
|
|
|
2,191 |
|
Total current assets |
|
39,398 |
|
|
|
27,385 |
|
Property, plant and equipment,
net |
|
6,370 |
|
|
|
5,692 |
|
Intangible assets, net |
|
1,580 |
|
|
|
2,300 |
|
Right-of-use assets |
|
2,270 |
|
|
|
2,538 |
|
Other assets |
|
233 |
|
|
|
228 |
|
Total assets |
$ |
49,851 |
|
|
$ |
38,143 |
|
Liabilities and Stockholders' Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
2,006 |
|
|
$ |
2,477 |
|
Accrued liabilities |
|
1,383 |
|
|
|
1,530 |
|
Accrued payroll and benefits |
|
2,869 |
|
|
|
2,733 |
|
Deferred revenue |
|
70 |
|
|
|
83 |
|
Current portion of lease obligations |
|
728 |
|
|
|
682 |
|
Total current liabilities |
|
7,056 |
|
|
|
7,505 |
|
Long-term debt, net |
|
9,751 |
|
|
|
9,538 |
|
Long-term portion of lease obligations |
|
1,738 |
|
|
|
2,027 |
|
Total liabilities |
|
18,545 |
|
|
|
19,070 |
|
Commitments and
contingencies |
|
|
|
Stockholders' equity: |
|
|
|
Common shares ($0.001 par value, 300,000,000 shares authorized,
80,045,696 and 32,902,048 shares issued and outstanding at
September 30, 2022 and December 31, 2021, respectively) |
|
80 |
|
|
|
33 |
|
Warrants |
|
11,148 |
|
|
|
1,373 |
|
Additional paid-in-capital |
|
255,642 |
|
|
|
216,685 |
|
Accumulated other comprehensive loss |
|
(6,928 |
) |
|
|
(6,928 |
) |
Accumulated deficit |
|
(228,636 |
) |
|
|
(192,090 |
) |
Total stockholders'
equity |
|
31,306 |
|
|
|
19,073 |
|
Total liabilities and
stockholders' equity |
$ |
49,851 |
|
|
$ |
38,143 |
|
MEDAVAIL HOLDINGS,
INC.Supplemental Financial Information -
Segments(in thousands)(Unaudited)
|
Retail Pharmacy Services |
|
Pharmacy Technology |
|
Total |
Three Months Ended
September 30, 2022 |
|
|
|
|
|
Revenue: |
|
|
|
|
|
Pharmacy and hardware revenue: |
|
|
|
|
|
Retail pharmacy revenue |
$ |
11,162 |
|
$ |
— |
|
$ |
11,162 |
Hardware |
|
— |
|
|
— |
|
|
— |
Subscription |
|
— |
|
|
104 |
|
|
104 |
Total pharmacy and hardware revenue |
|
11,162 |
|
|
104 |
|
|
11,266 |
Service revenue: |
|
|
|
|
|
Software |
|
— |
|
|
94 |
|
|
94 |
Maintenance and support |
|
— |
|
|
48 |
|
|
48 |
Installation |
|
— |
|
|
— |
|
|
— |
Professional services and other |
|
— |
|
|
53 |
|
|
53 |
Total service revenue |
|
— |
|
|
195 |
|
|
195 |
Total revenue |
|
11,162 |
|
|
299 |
|
|
11,461 |
Cost of products sold and
services |
|
10,047 |
|
|
122 |
|
|
10,169 |
Segment gross profit |
$ |
1,115 |
|
$ |
177 |
|
|
1,292 |
|
Retail Pharmacy Services |
|
Pharmacy Technology |
|
Total |
Three Months Ended
September 30, 2021 |
|
|
|
|
|
Revenue: |
|
|
|
|
|
Pharmacy and hardware revenue: |
|
|
|
|
|
Retail pharmacy revenue |
$ |
5,445 |
|
$ |
— |
|
$ |
5,445 |
Hardware |
|
— |
|
|
106 |
|
|
106 |
Subscription |
|
— |
|
|
108 |
|
|
108 |
Total pharmacy and hardware revenue |
|
5,445 |
|
|
214 |
|
|
5,659 |
Service revenue: |
|
|
|
|
|
Software |
|
— |
|
|
51 |
|
|
51 |
Maintenance and support |
|
— |
|
|
44 |
|
|
44 |
Installation |
|
— |
|
|
11 |
|
|
11 |
Professional services and other |
|
— |
|
|
27 |
|
|
27 |
Total service revenue |
|
— |
|
|
133 |
|
|
133 |
Total revenue |
|
5,445 |
|
|
347 |
|
|
5,792 |
Cost of products sold and
services |
|
5,366 |
|
|
240 |
|
|
5,606 |
Segment gross profit |
$ |
79 |
|
$ |
107 |
|
|
186 |
Non-GAAP Financial Measures
To supplement our consolidated condensed
financial statements, which are prepared and presented in
accordance with GAAP, we use the following non-GAAP financial
measures: EBITDA, and adjusted EBITDA. The presentation of this
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP.
We define Adjusted EBITDA for a particular
period as net (loss) income before interest, taxes, depreciation
and amortization, and as further adjusted for non-recurring revenue
from stock-based compensation expense.
We use these non-GAAP financial measures for
financial and operational decision-making and as a means to
evaluate period-to-period comparisons. We believe that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain items
that may not be indicative of our recurring core business operating
results, like one-time transaction costs related to the reverse
merger. We believe that both management and investors benefit from
referring to these non-GAAP financial measures in assessing our
performance and when planning, forecasting, and analyzing future
periods. These non-GAAP financial measures also facilitate
management's internal comparisons to our historical performance and
liquidity as well as comparisons to our competitors' operating
results. We believe these non-GAAP financial measures are useful to
investors both because (1) they allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision-making and (2) they are used by our
institutional investors and the analyst community to help them
analyze the health of our business.
There are a number of limitations related to the
use of non-GAAP financial measures. We compensate for these
limitations by providing specific information regarding the GAAP
amounts excluded from these non-GAAP financial measures and
evaluating these non-GAAP financial measures together with their
relevant financial measures in accordance with GAAP.
MEDAVAIL HOLDINGS,
INC.Unaudited Reconciliation of GAAP to Non-GAAP
Measures(in thousands)
|
Three Months Ended September 30, |
|
2022 |
|
2021 |
Net loss |
$ |
(11,806 |
) |
|
$ |
(11,273 |
) |
Adjustments to calculate
EBITDA: |
|
|
|
Interest income |
|
— |
|
|
|
(7 |
) |
Interest expense |
|
315 |
|
|
|
260 |
|
Income tax expense |
|
— |
|
|
|
2 |
|
Depreciation and amortization(1) |
|
1,616 |
|
|
|
526 |
|
EBITDA |
$ |
(9,875 |
) |
|
$ |
(10,492 |
) |
Adjustments as follows: |
|
|
|
Share-based compensation expense |
|
565 |
|
|
|
365 |
|
Adjusted EBITDA |
$ |
(9,310 |
) |
|
$ |
(10,127 |
) |
(1) Excludes $164 thousand and $213 thousand in operating lease
amortization for the three months ended September 30, 2022, and
2021, respectively.
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