UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of report (Date of earliest event reported):
August 7, 2023
TABULA RASA HEALTHCARE, INC.
(Exact Name of Registrant Specified in Charter)
| Delaware |
|
001-37888 |
|
46-5726437 |
(State or
Other
Jurisdiction of
Incorporation)
|
|
(Commission File
Number)
|
|
(I.R.S. Employer
Identification No.)
|
228 Strawbridge Drive, Suite 100
Moorestown, New Jersey | |
08057 |
| (Address of Principal Executive Offices)
|
|
(Zip Code) |
Registrant’s telephone number, including area code: (866) 648-2767
Not Applicable
(Former Name or Former Address, if Changed Since
Last Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
| |
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
x |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: |
|
Trading Symbol |
|
Name of each exchange
on which registered: |
| Common Stock, par value $0.0001 per share |
|
TRHC |
|
The Nasdaq Stock Market |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant
to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
On August 7, 2023, Tabula Rasa HealthCare, Inc. (the “Company”)
issued a press release announcing its 2023 second quarter financial results. The press release is being furnished with this Current Report
on Form 8-K as Exhibit 99.1 and is hereby incorporated herein by reference.
The information provided in this Item 2.02 (including Exhibit 99.1)
of this Current Report on Form 8-K is being furnished and shall not be deemed to be “filed” for the purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities thereof. The
information in this Current Report on Form 8-K shall not be deemed to be incorporated by reference in any filing made by the Company
pursuant to the Securities Act of 1933, as amended, or the Exchange Act, other than to the extent that such filing incorporates by reference
any or all of such information by express reference thereto.
Item 9.01. Financial Statements and Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
| |
TABULA RASA HEALTHCARE, INC. |
| |
|
|
| |
By: |
/s/ Brian W. Adams |
| |
|
Brian W. Adams |
| |
|
President and Chief Executive Officer |
Dated: August 7, 2023
Exhibit 99.1
Tabula Rasa HealthCare Reports Second Quarter
2023 Financial Results
Continued Strong Organic Revenue Growth of
24%
Second Quarter Adjusted EBITDA of $6.3 Million
Increased More Than 3x Compared to Second Quarter 2022
MOORESTOWN, N.J., August 7, 2023 – Tabula Rasa HealthCare, Inc.®
(Nasdaq:TRHC) (“TRHC” or the “Company”), a leading healthcare company advancing personalized, comprehensive care
for value-based care organizations, today reported financial results for the second quarter ended June 30, 2023.
Highlights from the second quarter ended June 30, 2023 include:
| · | Second
quarter revenue from continuing operations of $90.0 million increased 24%, including medication
revenue growth of 25% and technology-enabled solutions revenue growth of 22% versus the prior
year second quarter. |
| · | Second
quarter GAAP net loss and adjusted EBITDA from continuing operations of $9.7 million and
$6.3 million, respectively, compares with $12.7 million and $2.1 million in the second
quarter of 2022. |
“We delivered another impressive quarter demonstrating the strength
of the underlying organic growth in our core PACE market and our commitment to significantly improve profitability. This is a testament
to the strong performance by our employees who remain focused on serving the most complex and vulnerable individuals in PACE and other
value-based care models,” said Brian Adams, President and Chief Executive Officer.
Key
Financial Results
(in
millions except percentages)
| | |
Q2 | | |
Q2 2023 | |
| | |
2023 | | |
2022 | | |
% Change | | |
Guidance | |
| Revenue from continuing operations | |
$ | 90.0 | | |
$ | 72.6 | | |
| 24 | % | |
$ | 88.0 -
90.0 | |
| Gross margin | |
| 25.0 | % | |
| 22.0 | % | |
| | | |
| | |
| Adjusted gross margin | |
| 25.6 | % | |
| 23.1 | % | |
| | | |
| | |
| GAAP net loss from continuing operations | |
$ | (9.7 | ) | |
$ | (12.7 | ) | |
| 23 | % | |
| | |
| Adjusted net income (loss) from continuing operations | |
$ | 0.7 | | |
$ | (2.7 | ) | |
| 127 | % | |
| | |
| Adjusted EBITDA from continuing operations | |
$ | 6.3 | | |
$ | 2.1 | | |
| 207 | % | |
$ | 3.5
- 4.5 | |
Second Quarter 2023 Financial Results
All comparisons, unless otherwise noted, are to the three months ended
June 30, 2022, and reflect continuing operations.
| · | Revenue
– Revenue of $90.0 million increased 24% compared to $72.6 million in the second
quarter of 2022 and increased 2% as compared to the first quarter of 2023. Medication revenue
of $69.6 million increased 25% due to continued PACE census growth and higher revenue per
PACE participant. Technology-enabled solutions revenue of $20.4 million increased 22% compared
to $16.7 million in the second quarter of 2022 and increased 5% as compared to the first
quarter of 2023. |
| · | Gross
Profit – Gross profit (exclusive of depreciation and amortization) of $22.5 million
(25.0% of revenue) increased 41% as compared to $16.0 million (22.0% of revenue) in the second
quarter of 2022. Adjusted gross profit of $23.0 million (25.6% of revenue) increased 37%
as compared to $16.8 million (23.1% of revenue) a year ago. Both medication and technology-enabled
solutions gross margins increased vs. the year-ago period, driven by increased scale and
operating efficiency improvements. |
| · | GAAP
Net Loss – GAAP net loss from continuing operations of $9.7 million decreased as
compared to a net loss of $12.7 million in the second quarter of 2022. GAAP net loss from
discontinued operations (net of tax) of $0.1 million compared to a net loss of $36.9 million
in the second quarter of 2022. The second quarter of 2022 included the PrescribeWellness,
SinfoníaRx and DoseMe businesses. As previously announced on March 2, 2023, TRHC
completed the sales of SinfoníaRx and DoseMe during the first quarter of 2023. |
| · | Adjusted
EBITDA – Adjusted EBITDA from continuing operations of $6.3 million (7.0% of revenue)
increased 207% vs. $2.1 million (2.8% of revenue) in the second quarter of 2022. The improvement
vs. the prior year was driven by the higher gross profit noted above and disciplined cost
management. |
A
reconciliation of certain financial measures with the most directly comparable financial measures calculated in accordance with generally
accepted accounting principles in the United States (“GAAP”) has been provided in this press release in the accompanying
tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”
Operational Metrics
To provide transparency into our financial results, we are providing
the following operational metrics.
| | |
As of | |
| | |
June 30, | | |
September 30, | | |
December 31, | | |
March 31, | | |
June 30, | |
| | |
2022 | | |
2022 | | |
2022 | | |
2023 | | |
2023 | |
| PACE
census1: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Medication census | |
| 18,639 | | |
| 19,806 | | |
| 20,555 | | |
| 20,705 | | |
| 21,070 | |
| Technology-enabled solutions census | |
| 50,763 | | |
| 52,230 | | |
| 53,430 | | |
| 54,135 | | |
| 55,804 | |
| Total PACE census | |
| 50,763 | | |
| 52,230 | | |
| 53,430 | | |
| 54,135 | | |
| 55,804 | |
| | |
Three
Months Ended | |
| | |
June 30, | | |
September 30, | | |
December 31, | | |
March 31, | | |
June 30, | |
| | |
2022 | | |
2022 | | |
2022 | | |
2023 | | |
2023 | |
| PACE average revenue per participant per month: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Medication
average revenue per participant per month2 | |
$ | 1,036 | | |
$ | 1,051 | | |
$ | 1,056 | | |
$ | 1,110 | | |
$ | 1,100 | |
| Technology-enabled
solutions revenue per participant per month3 | |
| 91 | | |
| 91 | | |
| 92 | | |
| 98 | | |
| 99 | |
| Total PACE average revenue per participant per month | |
| 459 | | |
| 474 | | |
| 494 | | |
| 523 | | |
| 515 | |
PACE backlog as of June 30, 2023, was valued at $87 million in
annual revenue at maturity, which the Company defines as enrollment of 250 participants for PACE clients. By comparison, PACE backlog
was valued at $84 million as of March 31, 2023.
Cancellation of Q2 Earnings Conference Call
In
a separate press release, Tabula Rasa today announced that it entered into a definitive merger agreement to be acquired by Nautic Partners
(“Nautic”) for $10.50 in cash per share and will combine with ExactCare Pharmacy (“ExactCare”), a portfolio company
of Nautic. A copy of that press release is accessible by visiting the Investor Relations section of the Tabula Rasa corporate website
at ir.tabularasahealthcare.com. In light of the announced transaction, Tabula Rasa has cancelled the earnings conference
call previously scheduled for August 8. In addition, the Company is not providing further financial guidance for 2023 as a result
of the pending transaction.
About
Tabula Rasa HealthCare
Tabula
Rasa HealthCare (TRHC) (NASDAQ: TRHC) enables simplified and individualized care that improves the health of those we serve.
We offer comprehensive pharmacy services that include personalized, precision medication management and delivery as well as a suite of
clinical and business management tools that help health plans and at-risk provider groups optimize utilization and improve patient
health. For more information, visit TRHC.
1 Defined as the number of PACE participants utilizing
at least one of our solution lines.
2 This metric is calculated as quarterly medication revenue
from PACE clients divided by quarterly member months.
3 This metric is calculated as quarterly technology-enabled
solutions revenue from PACE clients across all solution lines divided by quarterly member months.
Non-GAAP Financial Measures
In
addition to reporting certain financial information in accordance with GAAP, TRHC is also reporting gross profit, adjusted EBITDA, adjusted
cost of revenue, adjusted gross profit, adjusted operating expenses, adjusted operating income (loss), and adjusted net income (loss),
in each case from continuing operations, which are considered non-GAAP financial measures. Generally, a non-GAAP financial measure is
a numerical measure of a company’s performance or financial position that either excludes or includes amounts that are not normally
excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. TRHC presents adjusted
EBITDA and the other non-GAAP financial measures in this release because it considers each of them to be an important supplemental measure
of performance. TRHC also intends to provide adjusted EBITDA and the other non-GAAP financial measures in this release as part of the
Company’s future earnings discussions and, therefore, their inclusion should provide consistency in the Company’s financial
reporting.
Adjusted
EBITDA consists of net income (loss) plus certain other expenses, which include interest expense, provision for income tax, depreciation
and amortization, change in fair value of contingent consideration receivable, impairment charges, business optimization expense, severance
costs, executive transition costs, settlement costs, divestiture-related expense, transformation-related expense, stock-based compensation
expense, and net loss on divestiture of businesses. TRHC considers business optimization expense to include employee and non-recurring
vendor costs incurred related to its business optimization initiatives during 2022. TRHC considers severance costs to include severance
costs related to the realignment of its resources. TRHC considers executive transition costs to include nonrecurring costs related to
the hiring and onboarding of new named executive officers. TRHC considers settlement costs to include amounts payable by TRHC or reductions
to amounts owed to TRHC as a result of a contractual settlement. TRHC considers divestiture-related expense to include non-recurring
direct transaction costs. TRHC considers transformation-related expense to include non-recurring advisory fees incurred to assess a variety
of strategic opportunities to increase shareholder value. TRHC considers net loss on divestiture of businesses to include the non-recurring
net loss resulting from the sales of the DoseMe and SinfoníaRx businesses. TRHC uses adjusted EBITDA for planning purposes,
including analysis of the Company’s performance against prior periods, the preparation of operating budgets and determination of
appropriate levels of operating and capital investments. TRHC believes that adjusted EBITDA provides additional insight for analysts
and investors in evaluating the Company’s financial and operational performance.
TRHC defines adjusted cost of revenue as cost of revenue as presented
on the consolidated statements of operations less those certain other expenses which are added to operating income (loss) in calculating
adjusted operating income (loss) (as described below), including stock-based compensation expense and such other expenses, in each case
to the extent that they are included in cost of revenue. TRHC believes adjusted cost of revenue provides analysts and investors more
accurate information regarding the actual cost of products and services provided by TRHC, excluding the impact of certain non-cash charges
like stock-based compensation expense, and costs of revenue that are not recurring components of its core medication and technology-enabled
solutions costs, for better comparability of its cost of revenue between periods.
TRHC
defines gross profit as total revenue less total cost of revenue (exclusive of depreciation and amortization) as presented on
the consolidated statements of operations. TRHC defines gross margin as gross profit as a percentage of total revenue. TRHC defines adjusted
gross profit as total revenue less total cost of revenue (exclusive of depreciation and amortization) as presented on the consolidated
statements of operations, excluding the impact of those certain other expenses which are added to operating income (loss) in calculating
adjusted operating income (loss) (as described below), including stock-based compensation expense and such other expenses, in each case
to the extent that they are included in cost of revenue. TRHC defines adjusted gross margin as adjusted gross profit as a percentage
of total revenue. TRHC believes adjusted gross profit and adjusted gross margin provide analysts and investors more accurate information
regarding its core profit margin on sales, excluding the impact of certain non-cash charges like stock-based compensation expense, and
costs of revenue that are not recurring components of its core medication and technology-enabled solutions costs, for better comparability
of gross profit between periods.
TRHC defines adjusted operating expenses as operating expenses as
presented on the consolidated statements of operations plus or minus (as applicable) the impact those expenses added or subtracted from
operating income (loss) in calculating adjusted operating income (loss), in each case to the extent they are included in operating expense.
TRHC believes adjusted operating expenses provide analysts and investors more accurate information regarding its core operating expenses,
which include research and development costs, sales and marketing costs, general and administrative costs, depreciation of property and
equipment, and amortization of software development costs, excluding the impact of certain non-cash charges like amortization of intangible
assets acquired in prior business acquisitions and stock-based compensation expense, and charges that are not recurring components of
its core operating expenses, for better comparability between periods.
TRHC
defines adjusted operating income (loss) as operating income (loss) plus or minus (as applicable) amortization of acquired intangibles,
change in fair value of contingent consideration receivable, impairment charges, business optimization expense, severance costs, executive
transition costs, divestiture-related expense, transformation-related expense, and stock-based compensation expense. The items included
in the calculation of adjusted EBITDA are determined in calculating adjusted operating income (loss) in the same manner. TRHC believes
adjusted operating income (loss) provides analysts and investors more accurate information regarding its core operating income (loss),
excluding the impact of certain non-cash charges like amortization of intangible assets acquired in prior business acquisitions and stock-based
compensation expense, and charges that are not recurring components of its core operating expenses, for better comparability between
periods.
TRHC
defines adjusted net income (loss) as net income (loss) plus or minus (as applicable) the impact of those expenses added or subtracted
from operating income (loss) in calculating adjusted operating income (loss) along with the impact of amortization of debt discount and
issuance costs, and the tax impact of all those items using an effective statutory tax rate on pre-tax income (loss) adjusted for those
items. TRHC believes adjusted net income (loss) provides analysts and investors more accurate information regarding its core income (loss),
excluding the impact of certain non-cash charges like amortization of intangible assets acquired in prior business acquisitions and stock-based
compensation expense, and charges that are not recurring components of its core product and service costs or core operating expenses,
for better comparability between periods.
In addition to the reasons given above for providing each of the non-GAAP
financial measures included herein, TRHC believes each of these non-GAAP financials measures provides analysts and investors more accurate
information for better comparability to other companies, although such other companies may calculate non-GAAP financial measures differently
than TRHC.
Non-GAAP financial measures have limitations as an analytical tool.
Investors are encouraged to review the reconciliations of adjusted EBITDA, adjusted cost of revenue, adjusted gross profit, adjusted
operating expenses, adjusted operating income (loss), and adjusted net income (loss) to the most directly comparable GAAP measures provided
in the accompanying tables.
Safe Harbor Statement
This
press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended
(“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”),
including our guidance regarding revenue from continuing operations and adjusted EBITDA from continuing operations. Forward-looking statements
may be identified by words such as “believe,” “will,” “may,” “estimate,” “continue,”
“anticipate,” “intend,” “should,” “plan,” “expect,” “predict,”
“could,” “potentially” or the negative of these terms or similar expressions. You should read these statements
carefully because they discuss future expectations, contain projections of future results of operations or financial condition, or state
other “forward-looking” information. These statements relate to, without limitation, our future plans, objectives, expectations,
intentions, financial performance and the proposed acquisition of TRHC by Locke Buyer, LLC, an affiliate of Nautic, and the assumptions that underlie these statements.
These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially
from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to:
(i) our expectations regarding industry and market trends, including the expected growth and continued structural change
and consolidation in the market for healthcare in the United States; (ii) our expectations about the growth of Programs of All-Inclusive
Care for the Elderly (“PACE”) organizations; (iii) our expectations about private payers establishing their own at-risk
programs; (iv) the advantages of our solutions as compared to those of competitors; (v) our estimates about our financial performance;
(vi) the visibility into future cash flows from our business model; (vii) our ability to reduce expenses as a result of our
disposition of non-core businesses; (viii) our growth strategy, including our ability to grow our client base; (ix) our plans
to further penetrate existing markets and enter new markets; (x) expectations of earnings, revenue, and other financial items; (xi) plans,
strategies, and objectives of management for future operations; (xii) our ability to establish and maintain intellectual property
rights; (xiii) our ability to retain and hire necessary associates and appropriately staff our operations; (xiv) future capital
expenditures; (xv) future economic conditions or performance; (xvi) our plans to pursue strategic acquisitions and partnerships;
(xvii) our plans to expand and enhance our solutions; (xviii) our estimates regarding capital requirements and needs for additional
financing; (xix) the risk that the proposed transaction may not be completed in a timely manner or at all; (xx) the failure
to receive, on a timely basis or otherwise, the required approval of the proposed transaction by TRHC’s stockholders; (xxi) the
possibility that any or all of the various conditions to the consummation of the proposed transaction may not be satisfied or waived,
including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations
or restrictions placed on such approvals); (xxii) the possibility that competing offers or acquisition proposals for TRHC will be
made; (xxiii) the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive
transaction agreement relating to the proposed transaction, including in circumstances which would require TRHC to pay a termination
fee; (xxiv) the effect of the announcement or pendency of the proposed transaction on TRHC ability to attract, motivate or retain
key executives and employees, its ability to maintain relationships with its customers, vendors, service providers and others with whom
it does business, or its operating results and business generally; (xxv) risks related to the proposed transaction diverting management’s
attention from TRHC’s ongoing business operations; (xxvi) the risk of stockholder litigation in connection with the proposed
transaction, including resulting expense or delay; and (xxvii) the risks described in Part I, Item 1A of our 2022 Form 10-K,
filed with the SEC on March 10, 2023, and our other filings and reports filed with or furnished to the Securities and Exchange Commission.
Filings with the SEC are available on the SEC’s website at http://www.sec.gov. Forward-looking statements are based on our management’s
beliefs and assumptions and on information currently available to our management. These statements, like all statements in this report,
speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments, except
as required by applicable law. We caution investors that our business and financial performance are subject to substantial risks and
uncertainties.
Additional Information and Where to Find It
This press release may be deemed to be solicitation material in respect
of the proposed acquisition of TRHC by Locke Buyer, LLC, an affiliate of Nautic. In connection with the proposed transaction, TRHC intends to file relevant materials
with the SEC, including TRHC’s proxy statement in preliminary and definitive form. INVESTORS AND STOCKHOLDERS OF TRHC ARE URGED
TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING TRHC’S PROXY STATEMENT (IF AND WHEN AVAILABLE), BECAUSE THEY
CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders are or will be able to obtain
the documents (if and when available) free of charge at the SEC’s website at www.sec.gov, or free of charge within the Investor
Relations section of TRHC’s website http://ir.trhc.com or upon request from TRHC’s Investor Relations Department.
Participants in the Solicitation
TRHC and its directors, executive officers and other members of management
and employees, under SEC rules, may be deemed to be “participants” in the solicitation of proxies from stockholders of TRHC
in favor of the proposed transaction. Information about TRHC’s directors and executive officers is set forth in TRHC’s Proxy
Statement on Schedule 14A for its 2023 Annual Meeting of Stockholders, which was filed with the SEC on April 28, 2023. To the extent
holdings of TRHC’s securities by its directors or executive officers have changed since the amounts set forth in such 2023 proxy
statement, such changes have been or will be reflected on Initial Statements of Beneficial Ownership on Form 3 or Statements of
Change in Ownership on Form 4 filed with the SEC. Additional information concerning the interests of TRHC’s participants in
the solicitation, which may, in some cases, be different than those of TRHC’s stockholders generally, will be set forth in TRHC’s
proxy statement relating to the proposed transaction when it becomes available.
No Offer or Solicitation
This press release is not intended to and shall not constitute an
offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall
there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made in the
United States absent registration under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such
registration requirements.
TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands)
| | |
June 30, | | |
December 31, | |
| | |
2023 | | |
2022 | |
| Assets | |
| | | |
| | |
| Current assets: | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 62,811 | | |
$ | 70,017 | |
| Restricted cash | |
| 10,400 | | |
| 12,372 | |
| Accounts receivable, net | |
| 18,610 | | |
| 19,252 | |
| Inventories | |
| 8,659 | | |
| 6,566 | |
| Prepaid expenses | |
| 3,581 | | |
| 4,664 | |
| Client claims receivable | |
| 16,415 | | |
| 16,377 | |
| Divestiture-related note receivable | |
| 3,527 | | |
| — | |
| Other current assets | |
| 22,678 | | |
| 18,187 | |
| Current assets of
discontinued operations | |
| — | | |
| 22,825 | |
| Total current assets | |
| 146,681 | | |
| 170,260 | |
| Property and equipment, net | |
| 9,369 | | |
| 9,158 | |
| Operating lease right-of-use assets | |
| 10,149 | | |
| 10,483 | |
| Software development costs, net | |
| 33,077 | | |
| 32,592 | |
| Goodwill | |
| 115,323 | | |
| 115,323 | |
| Intangible assets, net | |
| 35,129 | | |
| 38,326 | |
| Contingent consideration receivable | |
| — | | |
| 3,350 | |
| Other assets | |
| 6,209 | | |
| 4,657 | |
| Total assets | |
$ | 355,937 | | |
$ | 384,149 | |
| | |
| | | |
| | |
| Liabilities and stockholders’ deficit | |
| | | |
| | |
| Current liabilities: | |
| | | |
| | |
| Current operating lease liabilities | |
$ | 2,982 | | |
$ | 2,708 | |
| Accounts payable | |
| 20,623 | | |
| 19,459 | |
| Client claims payable | |
| 10,981 | | |
| 10,781 | |
| Accrued expenses and other liabilities | |
| 59,105 | | |
| 55,745 | |
| Current liabilities
of discontinued operations | |
| — | | |
| 13,389 | |
| Total current liabilities | |
| 93,691 | | |
| 102,082 | |
| Long-term debt, net of discount | |
| 232,603 | | |
| 232,112 | |
| Long-term debt – related party, net of discount | |
| 88,709 | | |
| 88,522 | |
| Noncurrent operating lease liabilities | |
| 12,102 | | |
| 12,786 | |
| Deferred income tax liability, net | |
| 1,507 | | |
| 1,380 | |
| Other long-term liabilities | |
| 5,404 | | |
| 4,298 | |
| Total liabilities | |
| 434,016 | | |
| 441,180 | |
| | |
| | | |
| | |
| Stockholders’ equity (deficit): | |
| | | |
| | |
| Common stock | |
| 3 | | |
| 3 | |
| Treasury stock | |
| (4,049 | ) | |
| (3,391 | ) |
| Additional paid-in capital | |
| 359,573 | | |
| 354,214 | |
| Accumulated deficit | |
| (433,606 | ) | |
| (407,857 | ) |
| Total stockholders’ deficit | |
| (78,079 | ) | |
| (57,031 | ) |
| Total liabilities and stockholders’
deficit | |
$ | 355,937 | | |
$ | 384,149 | |
TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Revenue: | |
| | | |
| | | |
| | | |
| | |
| Medication revenue | |
$ | 69,626 | | |
$ | 55,892 | | |
$ | 138,376 | | |
$ | 106,865 | |
| Technology-enabled
solutions revenue | |
| 20,410 | | |
| 16,705 | | |
| 39,937 | | |
| 32,842 | |
| Total revenue | |
| 90,036 | | |
| 72,597 | | |
| 178,313 | | |
| 139,707 | |
| Cost of revenue, exclusive of depreciation and amortization
shown below: | |
| | | |
| | | |
| | | |
| | |
| Cost of medication revenue | |
| 53,554 | | |
| 43,384 | | |
| 106,636 | | |
| 82,936 | |
| Cost of technology-enabled
solutions revenue | |
| 13,953 | | |
| 13,247 | | |
| 28,395 | | |
| 26,416 | |
| Total cost of revenue,
exclusive of depreciation and amortization | |
| 67,507 | | |
| 56,631 | | |
| 135,031 | | |
| 109,352 | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Research and development | |
| 1,777 | | |
| 3,243 | | |
| 3,056 | | |
| 7,208 | |
| Sales and marketing | |
| 2,732 | | |
| 2,172 | | |
| 5,185 | | |
| 4,821 | |
| General and administrative | |
| 17,599 | | |
| 15,150 | | |
| 34,176 | | |
| 31,028 | |
| Change in fair value of contingent consideration
receivable | |
| 3,350 | | |
| — | | |
| 3,750 | | |
| — | |
| Long-lived asset impairment charge | |
| — | | |
| — | | |
| — | | |
| 4,062 | |
| Depreciation and
amortization | |
| 6,103 | | |
| 5,489 | | |
| 12,303 | | |
| 11,231 | |
| Total operating expenses | |
| 31,561 | | |
| 26,054 | | |
| 58,470 | | |
| 58,350 | |
| Loss from operations | |
| (9,032 | ) | |
| (10,088 | ) | |
| (15,188 | ) | |
| (27,995 | ) |
| Other income (expense): | |
| | | |
| | | |
| | | |
| | |
| Interest expense, net | |
| (1,144 | ) | |
| (2,444 | ) | |
| (2,409 | ) | |
| (4,713 | ) |
| Other income | |
| 566 | | |
| — | | |
| 1,018 | | |
| — | |
| Total other expense, net | |
| (578 | ) | |
| (2,444 | ) | |
| (1,391 | ) | |
| (4,713 | ) |
| Loss from continuing operations before income taxes | |
| (9,610 | ) | |
| (12,532 | ) | |
| (16,579 | ) | |
| (32,708 | ) |
| Income tax expense | |
| 133 | | |
| 159 | | |
| 238 | | |
| 375 | |
| Net loss from continuing operations | |
| (9,743 | ) | |
| (12,691 | ) | |
| (16,817 | ) | |
| (33,083 | ) |
| Net loss from discontinued operations,
net of tax | |
| (108 | ) | |
| (36,919 | ) | |
| (8,932 | ) | |
| (44,720 | ) |
| Net loss | |
$ | (9,851 | ) | |
$ | (49,610 | ) | |
$ | (25,749 | ) | |
$ | (77,803 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net loss per share: | |
| | | |
| | | |
| | | |
| | |
| Net loss per share from continuing operations, basic and diluted | |
$ | (0.38 | ) | |
$ | (0.53 | ) | |
$ | (0.66 | ) | |
$ | (1.38 | ) |
| Net loss per share from discontinued
operations, basic and diluted | |
| — | | |
| (1.54 | ) | |
| (0.35 | ) | |
| (1.87 | ) |
| Total net loss per share, basic and
diluted | |
$ | (0.38 | ) | |
$ | (2.07 | ) | |
$ | (1.01 | ) | |
$ | (3.25 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average common shares outstanding,
basic and diluted | |
| 25,422,032 | | |
| 23,959,726 | | |
| 25,333,137 | | |
| 23,913,050 | |
TABULA RASA HEALTHCARE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| | |
Six Months Ended | |
| | |
June 30, | |
| | |
2023 | | |
2022 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net loss | |
$ | (25,749 | ) | |
$ | (77,803 | ) |
| Adjustments to reconcile net loss to net cash (used in) provided
by operating activities: | |
| | | |
| | |
| Depreciation and amortization | |
| 12,303 | | |
| 18,562 | |
| Amortization of deferred financing costs
and debt discount | |
| 678 | | |
| 939 | |
| Deferred taxes | |
| 127 | | |
| (368 | ) |
| Stock-based compensation | |
| 5,238 | | |
| 15,301 | |
| Change in fair value of contingent consideration
receivable | |
| 3,750 | | |
| — | |
| Impairment charges | |
| 363 | | |
| 40,510 | |
| Net loss on divestiture of businesses | |
| 4,888 | | |
| — | |
| Other noncash items | |
| 292 | | |
| (54 | ) |
| Changes in operating assets and liabilities,
net of effect of divestitures: | |
| | | |
| | |
| Accounts receivable, net | |
| 514 | | |
| 2,979 | |
| Inventories | |
| (2,093 | ) | |
| (354 | ) |
| Prepaid expenses and other current assets | |
| (3,829 | ) | |
| (7,916 | ) |
| Client claims receivables | |
| (38 | ) | |
| (3,162 | ) |
| Other assets | |
| 3 | | |
| (769 | ) |
| Accounts payable | |
| (1,222 | ) | |
| 9,295 | |
| Accrued expenses and other liabilities | |
| 374 | | |
| 9,188 | |
| Client claims payables | |
| 200 | | |
| 353 | |
| Other long-term liabilities | |
| 554 | | |
| 2,139 | |
| Net cash (used in) provided by operating
activities | |
| (3,647 | ) | |
| 8,840 | |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Purchases of property and equipment | |
| (1,310 | ) | |
| (471 | ) |
| Software development costs | |
| (7,187 | ) | |
| (17,870 | ) |
| Proceeds from divestiture of businesses | |
| 3,384 | | |
| — | |
| Net cash used in investing activities | |
| (5,113 | ) | |
| (18,341 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from exercise of stock options | |
| 219 | | |
| 60 | |
| Payments for employee taxes for shares withheld | |
| (655 | ) | |
| — | |
| Payments for debt financing costs | |
| — | | |
| (350 | ) |
| Borrowings on line of credit | |
| — | | |
| 27,700 | |
| Net cash (used in) provided by financing
activities | |
| (436 | ) | |
| 27,410 | |
| | |
| | | |
| | |
| Net (decrease) increase in cash, cash equivalents and restricted
cash | |
| (9,196 | ) | |
| 17,909 | |
| Cash, cash equivalents and restricted
cash, beginning of period | |
| 82,407 | | |
| 15,706 | |
| Cash, cash equivalents and restricted
cash, end of period | |
$ | 73,211 | | |
$ | 33,615 | |
TABULA RASA HEALTHCARE, INC.
UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED
EBITDA
(In thousands)
| | |
Three
Months Ended June 30, | | |
Six
Months Ended June 30, | |
| | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Reconciliation of Net Loss to Adjusted EBITDA from Continuing
Operations | |
| | | |
| | | |
| | | |
| | |
| Net loss | |
$ | (9,851 | ) | |
$ | (49,610 | ) | |
$ | (25,749 | ) | |
$ | (77,803 | ) |
| Add: | |
| | | |
| | | |
| | | |
| | |
| Interest expense, net | |
| 1,144 | | |
| 2,444 | | |
| 2,409 | | |
| 4,713 | |
| Income tax expense | |
| 133 | | |
| 159 | | |
| 238 | | |
| 375 | |
| Depreciation and amortization | |
| 6,103 | | |
| 5,489 | | |
| 12,303 | | |
| 11,231 | |
| Change in fair value of contingent consideration
receivable | |
| 3,350 | | |
| — | | |
| 3,750 | | |
| — | |
| Impairment charges | |
| — | | |
| — | | |
| — | | |
| 4,062 | |
| Business optimization expense | |
| — | | |
| — | | |
| — | | |
| 787 | |
| Severance costs | |
| 385 | | |
| — | | |
| 776 | | |
| 575 | |
| Executive transition | |
| — | | |
| 150 | | |
| — | | |
| 150 | |
| Divestiture-related expense | |
| 352 | | |
| 1,414 | | |
| 1,368 | | |
| 1,534 | |
| Transformation-related expense | |
| 1,815 | | |
| — | | |
| 1,815 | | |
| — | |
| Stock-based compensation expense | |
| 2,770 | | |
| 5,092 | | |
| 5,200 | | |
| 12,795 | |
| Loss from discontinued
operations | |
| 108 | | |
| 36,919 | | |
| 8,932 | | |
| 44,720 | |
| Adjusted EBITDA from continuing operations | |
$ | 6,309 | | |
$ | 2,057 | | |
$ | 11,042 | | |
$ | 3,139 | |
| Adjusted EBITDA (loss) from discontinued
operations | |
| — | | |
| 1,117 | | |
| (2,676 | ) | |
| 2,557 | |
| Total Adjusted EBITDA | |
$ | 6,309 | | |
$ | 3,174 | | |
$ | 8,366 | | |
$ | 5,696 | |
| | |
Three
Months Ended June 30, | | |
Six
Months Ended June 30, | |
| | |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| Reconciliation of Net Loss from Discontinued Operations,
net of tax to Adjusted EBITDA (Loss) from Discontinued Operations | |
| | | |
| | | |
| | | |
| | |
| Net loss from discontinued operations, net of
tax | |
$ | (108 | ) | |
$ | (36,919 | ) | |
$ | (8,932 | ) | |
$ | (44,720 | ) |
| Add: | |
| | | |
| | | |
| | | |
| | |
| Income tax (benefit) expense | |
| (44 | ) | |
| (686 | ) | |
| 10 | | |
| (568 | ) |
| Depreciation and amortization | |
| — | | |
| — | | |
| — | | |
| 7,331 | |
| Impairment charges | |
| — | | |
| 35,608 | | |
| 363 | | |
| 36,448 | |
| Net loss on divestiture of businesses | |
| 152 | | |
| — | | |
| 4,888 | | |
| — | |
| Severance costs | |
| — | | |
| — | | |
| 957 | | |
| — | |
| Settlement | |
| — | | |
| 1,448 | | |
| — | | |
| 1,448 | |
| Divestiture-related expense | |
| — | | |
| 66 | | |
| — | | |
| 112 | |
| Stock-based compensation
expense | |
| — | | |
| 1,600 | | |
| 38 | | |
| 2,506 | |
| Adjusted EBITDA (loss) from discontinued
operations | |
$ | — | | |
$ | 1,117 | | |
$ | (2,676 | ) | |
$ | 2,557 | |
TABULA RASA HEALTHCARE, INC.
UNAUDITED RECONCILIATION OF STATEMENT OF OPERATIONS
TO NON-GAAP MEASURES
(In thousands)
| | |
Three
Months Ended June 30, 2023 | |
| | |
Cost of
Revenue | | |
Gross
Profit | | |
Gross
Margin
Percentage | | |
Operating
Expenses | | |
Operating
Income
(Loss) | | |
Net
Income
(Loss) | |
| Reconciliation of statement of operations to adjusted
amounts from continuing operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Statement of operations amounts | |
$ | 67,507 | | |
$ | 22,529 | | |
| 25.0 | % | |
$ | 31,561 | | |
$ | (9,032 | ) | |
$ | (9,743 | ) |
| Adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Amortization of acquired intangibles | |
| — | | |
| — | | |
| — | | |
| (1,598 | ) | |
| 1,598 | | |
| 1,598 | |
| Change in fair value of contingent consideration
receivable | |
| — | | |
| — | | |
| — | | |
| (3,350 | ) | |
| 3,350 | | |
| 3,350 | |
| Amortization of debt discount and issuance
costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 340 | |
| Severance costs | |
| — | | |
| — | | |
| — | | |
| (385 | ) | |
| 385 | | |
| 385 | |
| Divestiture-related expense | |
| — | | |
| — | | |
| — | | |
| (352 | ) | |
| 352 | | |
| 352 | |
| Transformation-related expense | |
| — | | |
| — | | |
| — | | |
| (1,815 | ) | |
| 1,815 | | |
| 1,815 | |
| Stock-based compensation expense | |
| (505 | ) | |
| 505 | | |
| 0.6 | % | |
| (2,265 | ) | |
| 2,770 | | |
| 2,770 | |
| Impact to income taxes | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| (129 | ) |
| Adjusted amounts | |
$ | 67,002 | | |
$ | 23,034 | | |
| 25.6 | % | |
$ | 21,796 | | |
$ | 1,238 | | |
$ | 738 | |
| | |
Three
Months Ended June 30, 2022 | |
| | |
Cost of
Revenue | | |
Gross
Profit | | |
Gross
Margin
Percentage | | |
Operating
Expenses | | |
Operating
Loss | | |
Net Loss | |
| Reconciliation of statement of operations to adjusted
amounts from continuing operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Statement of operations amounts | |
$ | 56,631 | | |
$ | 15,966 | | |
| 22.0 | % | |
$ | 26,054 | | |
$ | (10,088 | ) | |
$ | (12,691 | ) |
| Adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Amortization of acquired intangibles | |
| — | | |
| — | | |
| — | | |
| (1,695 | ) | |
| 1,695 | | |
| 1,695 | |
| Amortization of debt discount and issuance
costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 471 | |
| Executive transition | |
| — | | |
| — | | |
| — | | |
| (150 | ) | |
| 150 | | |
| 150 | |
| Divestiture-related expense | |
| — | | |
| — | | |
| — | | |
| (1,414 | ) | |
| 1,414 | | |
| 1,414 | |
| Stock-based compensation expense | |
| (793 | ) | |
| 793 | | |
| 1.1 | % | |
| (4,299 | ) | |
| 5,092 | | |
| 5,092 | |
| Impact to income taxes | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 1,126 | |
| Adjusted amounts | |
$ | 55,838 | | |
$ | 16,759 | | |
| 23.1 | % | |
$ | 18,496 | | |
$ | (1,737 | ) | |
$ | (2,743 | ) |
| | |
Six Months
Ended June 30, 2023 | |
| | |
Cost of
Revenue | | |
Gross
Profit | | |
Gross
Margin
Percentage | | |
Operating
Expenses | | |
Operating
Income
(Loss) | | |
Net
Income
(Loss) | |
| Reconciliation of statement of operations to adjusted
amounts from continuing operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Statement of operations amounts | |
$ | 135,031 | | |
$ | 43,282 | | |
| 24.3 | % | |
$ | 58,470 | | |
$ | (15,188 | ) | |
$ | (16,817 | ) |
| Adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Amortization of acquired intangibles | |
| — | | |
| — | | |
| — | | |
| (3,197 | ) | |
| 3,197 | | |
| 3,197 | |
| Change in fair value of contingent consideration
receivable | |
| — | | |
| — | | |
| — | | |
| (3,750 | ) | |
| 3,750 | | |
| 3,750 | |
| Amortization of debt discount and issuance
costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 678 | |
| Severance costs | |
| — | | |
| — | | |
| — | | |
| (776 | ) | |
| 776 | | |
| 776 | |
| Divestiture-related expense | |
| — | | |
| — | | |
| — | | |
| (1,368 | ) | |
| 1,368 | | |
| 1,368 | |
| Transformation-related expense | |
| — | | |
| — | | |
| — | | |
| (1,815 | ) | |
| 1,815 | | |
| 1,815 | |
| Stock-based compensation expense | |
| (984 | ) | |
| 984 | | |
| 0.5 | % | |
| (4,216 | ) | |
| 5,200 | | |
| 5,200 | |
| Impact to income taxes | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 184 | |
| Adjusted amounts | |
$ | 134,047 | | |
$ | 44,266 | | |
| 24.8 | % | |
$ | 43,348 | | |
$ | 918 | | |
$ | 151 | |
| | |
Six Months
Ended June 30, 2022 | |
| | |
Cost of
Revenue | | |
Gross
Profit | | |
Gross
Margin
Percentage | | |
Operating
Expenses | | |
Operating
Loss | | |
Net Loss | |
| Reconciliation of statement of operations to adjusted
amounts from continuing operations | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Statement of operations amounts | |
$ | 109,352 | | |
$ | 30,355 | | |
| 21.7 | % | |
$ | 58,350 | | |
$ | (27,995 | ) | |
$ | (33,083 | ) |
| Adjustments: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Amortization of acquired intangibles | |
| — | | |
| — | | |
| — | | |
| (3,389 | ) | |
| 3,389 | | |
| 3,389 | |
| Impairment charges | |
| — | | |
| — | | |
| — | | |
| (4,062 | ) | |
| 4,062 | | |
| 4,062 | |
| Amortization of debt discount and issuance
costs | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 939 | |
| Business optimization expense | |
| (433 | ) | |
| 433 | | |
| 0.3 | % | |
| (354 | ) | |
| 787 | | |
| 787 | |
| Severance costs | |
| — | | |
| — | | |
| — | | |
| (575 | ) | |
| 575 | | |
| 575 | |
| Executive transition | |
| — | | |
| — | | |
| — | | |
| (150 | ) | |
| 150 | | |
| 150 | |
| Divestiture-related expense | |
| — | | |
| — | | |
| — | | |
| (1,534 | ) | |
| 1,534 | | |
| 1,534 | |
| Stock-based compensation expense | |
| (1,918 | ) | |
| 1,918 | | |
| 1.4 | % | |
| (10,877 | ) | |
| 12,795 | | |
| 12,795 | |
| Impact to income taxes | |
| — | | |
| — | | |
| — | | |
| — | | |
| — | | |
| 2,585 | |
| Adjusted amounts | |
$ | 107,001 | | |
$ | 32,706 | | |
| 23.4 | % | |
$ | 37,409 | | |
$ | (4,703 | ) | |
$ | (6,267 | ) |
Contact:
Investors:
Frank Sparacino
fsparacino@trhc.com
Media:
Anthony Mirenda
amirenda@trhc.com
Tabula Rasa HealthCare (NASDAQ:TRHC)
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