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MedAvail Reports Second Quarter 2021 Financial Results

08/11/2021

MISSISSAUGA, Ontario & PHOENIX--(BUSINESS WIRE)-- MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”) a technology-enabled pharmacy company, today reported financial results for the three months ended June 30, 2021.

“We are pleased with our second quarter results which reflect continued momentum, as our sales grew 118% on a sequential basis,” said Ed Kilroy, Chief Executive Officer of MedAvail. “We are looking forward to bringing our Retail Pharmacy Services to the Florida region in the second half of 2021, and we remain excited about the opportunity to continue adding value to our current partners, as evidenced by our recent expansions in several key accounts. We are also pleased to announce two significant strategic endeavors: a new Retail Pharmacy Services partnership with Zipdrug, a subsidiary of Anthem, and a new Pharmacy Technology integration with Epic’s pharmacy system software.”

Mr. Kilroy continued, “Excluding the one-time revenue recognition adjustment associated with a large customer agreement in 2020, we expect to deliver revenue growth in excess of 100% in 2021 and to maintain this topline growth rate in 2022, assuming the world returns to its pre-Covid levels in due course. This growth is reinforced by demand we see for our offerings, ongoing expansions into new geographies, and our new strategic partnership opportunities.”

Second Quarter 2021 Financial and Operational Highlights

All comparisons, unless otherwise noted, are to the three months ended June 30, 2020.

  • Total net sales was $5.0 million, an increase of 118%
  • Total net sales by segment
    • Retail Pharmacy Services sales increased 162% to $4.5 million
    • Pharmacy Technology sales decreased 10% to $0.5 million
  • 12 MedCenter deployments compared to 7 total MedCenter deployments
  • Net Loss was $10.5 million compared to a net loss of $6.5 million
  • Adjusted EBITDA losses of $9.7 million compared to $4.6 million
  • Cash, cash equivalents, and restricted cash totaled $48.8 million as of quarter-end

Full Year 2021 Financial Outlook

With the healthcare industry gradually returning to a more normal environment, MedAvail saw Retail Pharmacy Services net revenue growth of 7% in July compared to June. However, primarily due to lingering COVID-19 uncertainties, we have encountered unanticipated headwinds with the timing of Boards of Pharmacy regulatory approvals and we are cautious that clinics will return to pre-Covid volume levels in the second half of 2021. Additionally, as we have enhanced our target clinic analytical capabilities, we have identified 10 clinics that do not meet our expectations going forward as they have begun to transition from the height of the COVID-19 period. We have decided to exit these sites prior to 2021 year-end and redeploy our valuable resources into clinics that more closely fit our target model. As a result, MedAvail has revised its 2021 net revenue guidance expectation from the prior range of between $27 to $31 million to at least $21 million.

The minimum number of new clinics MedAvail expects to deploy in 2021 remains unchanged at 45. We feel that all of the clinics in our current pipeline are aligned with our key criteria. Demand for our solution remains strong in the states where we currently are operating including Arizona, California, Michigan, and Florida.

Conference Call

MedAvail will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Wednesday, August 11, 2021 to discuss its second quarter 2021 financial results. A webcast of the conference call can be accessed at https://investors.medavail.com/. The webcast will be archived and available for replay for at least 90 days after the event.

About MedAvail

MedAvail Holdings, Inc. (NASDAQ: MDVL) is a technology-enabled pharmacy organization, 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.

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 projections and expectations for growth; expansion plans; 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 general economic, financial, legal, political and business conditions and changes in domestic and foreign markets; the potential effects of COVID-19; the outcome of judicial proceedings to which MedAvail is, or may become a party; changes in competitive conditions prevailing in the healthcare sector; the availability of capital; and the other risks discussed under the heading "Risk Factors" in our Annual Report on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”) on May 17, 2021, and other documents MedAvail files 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.

SOURCE MedAvail Holdings, Inc.

MEDAVAIL HOLDINGS, INC.

Consolidated Condensed Statements of Operations

(US Dollars in thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended

 

June 30, 2021

 

June 30, 2020

Sales:

 

 

 

Pharmacy and hardware sales

$

4,725

 

 

 

$

2,259

 

 

Service sales

305

 

 

 

52

 

 

Total sales

5,030

 

 

 

2,311

 

 

Cost of sales:

 

 

 

Pharmacy and hardware cost of sales

4,679

 

 

 

1,826

 

 

Service cost of sales

178

 

 

 

39

 

 

Total cost of sales

4,857

 

 

 

1,865

 

 

Gross profit

173

 

 

 

446

 

 

Pharmacy operations

2,292

 

 

 

1,116

 

 

General and administrative

6,646

 

 

 

3,580

 

 

Selling and marketing

1,497

 

 

 

570

 

 

Research and development

201

 

 

 

163

 

 

Merger expenses

 

 

 

1,283

 

 

Operating loss

(10,463

)

 

 

(6,266

)

 

Other gain (loss), net

38

 

 

 

 

 

Interest income

27

 

 

 

7

 

 

Interest expense

(66

)

 

 

(277

)

 

Loss before income taxes

(10,464

)

 

 

(6,536

)

 

Income tax

 

 

 

 

 

Net loss

$

(10,464

)

 

 

$

(6,536

)

 

Net loss per share - basic and diluted

$

(0.32

)

 

 

$

(3.35

)

 

Weighted average shares outstanding - basic and diluted

32,546,395

 

 

1,953,049

 

MEDAVAIL HOLDINGS, INC.

Consolidated Condensed Balance Sheets

(US Dollars in thousands, except share amounts)

 

 

 

 

 

June 30,

 

December 31,

 

2021

 

 

2020

 

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

48,735

 

 

 

$

57,936

 

 

Restricted cash

62

 

 

 

60

 

 

Accounts receivable (net of allowance for doubtful accounts of $39 thousand for June 30, 2021, $40 thousand for December 31, 2020)

1,058

 

 

 

1,520

 

 

Inventories

3,171

 

 

 

2,817

 

 

Prepaid expenses and other current assets

1,039

 

 

 

1,534

 

 

Total current assets

54,065

 

 

 

63,867

 

 

Property, plant and equipment, net

4,302

 

 

 

3,795

 

 

Right-of-use assets

1,283

 

 

 

1,239

 

 

Other assets

214

 

 

 

203

 

 

Intangible assets

1,386

 

 

 

227

 

 

Total assets

$

61,250

 

 

 

$

69,331

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

7,047

 

 

 

$

4,512

 

 

Short-term debt

1,000

 

 

 

2,161

 

 

Contract liability

328

 

 

 

275

 

 

Current portion of lease obligations

549

 

 

 

665

 

 

Total current liabilities

8,924

 

 

 

7,613

 

 

Long-term debt, net

9,414

 

 

 

 

 

Long-term portion of lease obligations

813

 

 

 

651

 

 

Total liabilities

19,151

 

 

 

8,264

 

 

Commitments and contingencies

 

 

 

Stockholders' deficit:

 

 

 

Common shares ($0.001 par value, 100,000,000 shares authorized, 32,583,734 and 31,816,020 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively)

33

 

 

 

32

 

 

Warrants

1,485

 

 

 

2,614

 

 

Additional paid-in-capital

215,700

 

 

 

213,624

 

 

Accumulated other comprehensive loss

(6,928

)

 

 

(6,928

)

 

Accumulated deficit

(168,191

)

 

 

(148,275

)

 

Total stockholders' equity

42,099

 

 

 

61,067

 

 

Total liabilities and stockholders' equity

$

61,250

 

 

 

$

69,331

 

 

MEDAVAIL HOLDINGS, INC.

Supplemental Financial Information - Segments

(US Dollars in thousands)

(Unaudited)

 

 

Retail Pharmacy
Services

 

Pharmacy Technology

 

Total

Three Months Ended June 30, 2021

 

 

 

 

 

Sales:

 

 

 

 

 

Pharmacy and hardware sales:

 

 

 

 

 

Retail pharmacy sales

$

4,494

 

 

$

 

 

$

4,494

 

Hardware

 

 

123

 

 

123

 

Subscription sales

 

 

108

 

 

108

 

Total pharmacy and hardware sales

4,494

 

 

231

 

 

4,725

 

Service sales:

 

 

 

 

 

Software

 

 

41

 

 

41

 

Maintenance and support

 

 

40

 

 

40

 

Installation

 

 

12

 

 

12

 

Professional services and other

 

 

212

 

 

212

 

Total service sales

 

 

305

 

 

305

 

Total sales

4,494

 

 

536

 

 

5,030

 

Cost of sales

4,435

 

 

422

 

 

4,857

 

Gross profit

$

59

 

 

$

114

 

 

$

173

 

 

Retail Pharmacy
Services

 

Pharmacy Technology

 

Total

Three Months Ended June 30, 2020

 

 

 

 

 

Sales:

 

 

 

 

 

Pharmacy and hardware sales:

 

 

 

 

 

Retail pharmacy sales

$

1,713

 

 

$

 

 

$

1,713

 

Hardware

 

 

423

 

 

423

 

Subscription sales

 

 

123

 

 

123

 

Total pharmacy and hardware sales

1,713

 

 

546

 

 

2,259

 

Service sales:

 

 

 

 

 

Software

 

 

10

 

 

10

 

Maintenance and support

 

 

13

 

 

13

 

Installation

 

 

28

 

 

28

 

Professional services and other

 

 

1

 

 

1

 

Total service sales

 

 

52

 

 

52

 

Total sales

1,713

 

 

598

 

 

2,311

 

Cost of sales

1,679

 

 

186

 

 

1,865

 

Gross profit

$

34

 

 

$

412

 

 

$

446

 

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 merger-related expenses, and 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

(US Dollars in thousands)

 

 

 

Three Months Ended

 

2021

 

 

2020

 

Net loss

$

(10,464

)

 

 

$

(6,536

)

 

Adjustments to calculate EBITDA:

 

 

 

Interest income

(27

)

 

 

(7

)

 

Interest expense

66

 

 

 

277

 

 

Income tax

 

 

 

 

 

Depreciation and amortization (1)

380

 

 

 

278

 

 

EBITDA

$

(10,045

)

 

 

$

(5,988

)

 

Adjustments as follows:

 

 

 

Merger expenses

 

 

 

1,283

 

 

Share-based compensation expense

323

 

 

 

86

 

 

Adjusted EBITDA

$

(9,722

)

 

 

$

(4,619

)

 

(1) Excludes $538 thousand and $143 thousand in operating lease amortization for the three month periods ended June 30, 2021, and 2020, respectively.

Investor Relations
Caroline Paul
Gilmartin Group
ir@medavail.com

Source: MedAvail Holdings Inc.

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