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MedAvail Reports First Quarter 2022 Financial Results

05/12/2022

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 March 31, 2022.

“I am proud of our team’s strong start to the year. We delivered robust sales growth in the first quarter and achieved a milestone in our Pharmacy Technology business with the completion of our integration with Epic,” said Mark Doerr, Chief Executive Officer of MedAvail. “There is clear momentum and demand for our differentiated pharmacy technology solutions, and we are deliberately investing in our teams and business to drive this growth. We are excited for our path forward and the significant opportunity ahead, as we focus on execution of our expansion strategy with new and existing clinic partners and driving initiatives to deliver sustainable and profitable growth.”

Recent Operational Highlights

  • Ended first quarter of 2022 with 92 MedCenter total net cumulative deployments, a 14% increase from the end of the fourth quarter of 2021
    • Ended first quarter of 2022 with 88 MedCenter total net dispensing deployments, a 29% increase from the end of the fourth quarter of 2021
  • Achieved milestone with Epic integration and the availability of the MedCenter platform in the Epic App Orchard Gallery
  • Completed rewrite of MedDispense software intended to enable greater flexibility and faster deployment of MedCenters
  • Expanded partnership with IMA Medical Group to open SpotRx locations across the IMA network in Florida, including 17 additional and five de novo IMA medical centers
  • Broadened partnership with Oak Street Health to add SpotRx locations in four de novo sites in Arizona
  • Expanded partnership with Cano Health to open SpotRx locations in nine additional sites in Florida
  • Important enhancement of leadership team with accomplished executives who bring directly relevant track records of success with the appointments of Steven Hess to Executive Vice President, General Manager of SpotRx; Bob McClune to Senior Vice President of Data and Analytics; and Matt Broome to Executive Vice President, Technology

First Quarter 2022 and Recent Financial Highlights

All comparisons, unless otherwise noted, are to the three months ended March 31, 2021.

  • Total revenue increased 126% to $9.1 million
  • Total revenue by segment
    • Retail Pharmacy Services revenue increased 159% to $8.8 million
    • Pharmacy Technology revenue decreased 56% to $0.3 million
  • Net operating loss was $12.8 million compared to $9.7 million
  • Adjusted EBITDA loss of $11.8 million compared to $8.9 million
  • The Company completed its first closing of a private placement for the sale of common stock, together with the issuance of warrants to purchase common stock. The first closing of this private placement was on April 4, 2022, that yielded gross proceeds of approximately $40 million. The second closing is expected to subsequently follow on July 1, 2022, following the satisfaction or waiver of the conditions to closing, and yield approximately $10 million in gross proceeds. If all warrants that are sold and issued following the completion of these closings are fully exercised, the Company would receive additional gross proceeds of approximately $29 million.

Conference Call

MedAvail will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Thursday, May 12, 2022, to discuss its first quarter 2022 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.

Definition of Key Metrics

Dispensing Deployments

We define dispensing deployments as sites that are live, that is, have payer network acceptance, pharmacy board approvals and trained clinical staff or clinical account managers. Moreover, we work closely with the state boards of pharmacy and our clinic partners to reduce the time to progress from deployment to becoming dispensing deployments, which generally ranges from 4 to 12 weeks.

Net Cumulative Deployments

Net cumulative deployments includes dispensing deployments and installed not yet dispensing deployments, but excludes decommissioned clinics, pilots and demo sites.

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.

Non-GAAP Financial Measures

MedAvail 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 projections and expectations for growth and profitability; customer demand and expansion plans; margin improvement; improvements in deployment efficiency and speed; anticipated proceeds from private offerings; 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, filed with the Securities and Exchange Commission (“SEC”) on March 29, 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, 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.

SOURCE MedAvail Holdings, Inc.

MEDAVAIL HOLDINGS, INC.

Consolidated Condensed Statements of Operations

(in thousands, except share and per share data)

(Unaudited)

 

Three Months Ended March 31,

 

2022

 

2021 (1)

Revenue:

 

 

 

Pharmacy and hardware revenue

$

9,014

 

 

$

3,781

 

Service revenue

 

100

 

 

 

246

 

Total revenue

 

9,114

 

 

 

4,027

 

Cost of products sold and services:

 

 

 

Pharmacy and hardware cost of products sold

 

8,563

 

 

 

3,526

 

Service costs

 

50

 

 

 

181

 

Total cost of products sold and services

 

8,613

 

 

 

3,707

 

Operating expenses:

 

 

 

Pharmacy operations

 

3,929

 

 

 

2,593

 

General and administrative

 

6,535

 

 

 

5,676

 

Selling and marketing

 

2,313

 

 

 

1,534

 

Research and development

 

493

 

 

 

168

 

Merger expenses

 

 

 

 

 

Total operating expense

 

13,270

 

 

 

9,971

 

Operating loss

 

(12,769

)

 

 

(9,651

)

Other gain (loss), net

 

 

 

 

161

 

Interest income

 

1

 

 

 

40

 

Interest expense

 

(254

)

 

 

(2

)

Loss before income taxes

 

(13,022

)

 

 

(9,452

)

Income tax expense

 

 

 

 

 

Net loss

$

(13,022

)

 

$

(9,452

)

(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 March 31, 2021

 

 

 

Current presentation

 

As previously reported

 

Change

Pharmacy operations

$

2,593

 

$

1,911

 

$

682

 

General and administrative

 

5,676

 

 

6,515

 

 

(839

)

Selling and marketing

 

1,534

 

 

1,377

 

 

157

 

 

$

9,803

 

$

9,803

 

$

 

MEDAVAIL HOLDINGS, INC.

Consolidated Condensed Balance Sheets

(in thousands, except share and per share amounts)

 

March 31,

 

December 31,

 

2022

 

2021

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

5,274

 

 

$

19,689

 

Restricted cash

 

676

 

 

 

400

 

Accounts receivable (net of allowance for doubtful accounts of $96 thousand for March 31, 2022, $60 thousand for December 31, 2021)

 

1,748

 

 

 

1,189

 

Inventories

 

5,088

 

 

 

3,916

 

Prepaid expenses and other current assets

 

3,105

 

 

 

2,191

 

Total current assets

 

15,891

 

 

 

27,385

 

Property, plant and equipment, net

 

6,175

 

 

 

5,692

 

Intangible assets, net

 

2,765

 

 

 

2,300

 

Right-of-use assets

 

2,628

 

 

 

2,538

 

Other assets

 

233

 

 

 

228

 

Total assets

$

27,692

 

 

$

38,143

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

8,527

 

 

$

6,740

 

Short-term debt

 

 

 

 

 

Deferred revenue

 

107

 

 

 

83

 

Current portion of lease obligations

 

733

 

 

 

682

 

Total current liabilities

 

9,367

 

 

 

7,505

 

Long-term debt, net

 

9,608

 

 

 

9,538

 

Long-term portion of lease obligations

 

2,102

 

 

 

2,027

 

Other liabilities

 

 

 

 

 

Total liabilities

 

21,077

 

 

 

19,070

 

Commitments and contingencies

 

 

 

Stockholders' deficit:

 

 

 

Common shares ($0.001 par value, 100,000,000 shares authorized, 32,908,922 and 32,902,048 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively)

 

33

 

 

 

33

 

Warrants

 

1,373

 

 

 

1,373

 

Additional paid-in-capital

 

217,249

 

 

 

216,685

 

Accumulated other comprehensive loss

 

(6,928

)

 

 

(6,928

)

Accumulated deficit

 

(205,112

)

 

 

(192,090

)

Total stockholders' equity

 

6,615

 

 

 

19,073

 

Total liabilities and stockholders' equity

$

27,692

 

 

$

38,143

 

MEDAVAIL HOLDINGS, INC.

Supplemental Financial Information - Segments

(in thousands)

(Unaudited)

 

Retail Pharmacy
Services

 

Pharmacy
Technology

 

Total

Three Months Ended March 31, 2022

 

 

 

 

 

Revenue:

 

 

 

 

 

Pharmacy and hardware revenue:

 

 

 

 

 

Retail pharmacy revenue

$

8,849

 

$

 

$

8,849

Hardware

 

 

 

56

 

 

56

Subscription

 

 

 

109

 

 

109

Total pharmacy and hardware revenue

 

8,849

 

 

165

 

 

9,014

Service revenue:

 

 

 

 

 

Software integration

 

 

 

 

 

Software

 

 

 

48

 

 

48

Maintenance and support

 

 

 

32

 

 

32

Installation

 

 

 

6

 

 

6

Professional services and other

 

 

 

14

 

 

14

Total service revenue

 

 

 

100

 

 

100

Total revenue

 

8,849

 

 

265

 

 

9,114

Cost of products sold and services

 

8,482

 

 

131

 

 

8,613

Segment gross profit

$

367

 

$

134

 

 

501

 

Retail Pharmacy
Services

 

Pharmacy
Technology

 

Total

Three Months Ended March 31, 2021

 

 

 

 

 

Revenue:

 

 

 

 

 

Pharmacy and hardware revenue:

 

 

 

 

 

Retail pharmacy revenue

$

3,418

 

$

 

$

3,418

Hardware

 

 

 

241

 

 

241

Subscription

 

 

 

122

 

 

122

Total pharmacy and hardware revenue

 

3,418

 

 

363

 

 

3,781

Service revenue:

 

 

 

 

 

Software integration

 

 

 

 

 

Software

 

 

 

33

 

 

33

Maintenance and support

 

 

 

31

 

 

31

Installation

 

 

 

16

 

 

16

Professional services and other

 

 

 

166

 

 

166

Total service revenue

 

 

 

246

 

 

246

Total revenue

 

3,418

 

 

609

 

 

4,027

Cost of products sold and services

 

3,329

 

 

378

 

 

3,707

Segment gross profit

$

89

 

$

231

 

 

320

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 March 31,

 

2022

 

2021 (1)

Net loss

$

(13,022

)

 

$

(9,452

)

Adjustments to calculate EBITDA:

 

 

 

Interest income

 

(1

)

 

 

(40

)

Interest expense

 

254

 

 

 

2

 

Income tax expense

 

 

 

 

 

Depreciation and amortization (1)

 

432

 

 

 

340

 

EBITDA

$

(12,337

)

 

$

(9,150

)

Adjustments as follows:

 

 

 

Share-based compensation expense

 

564

 

 

 

260

 

Adjusted EBITDA

$

(11,773

)

 

$

(8,890

)

(1) Excludes $166 thousand and $162 thousand in operating lease amortization for the three months ended March 31, 2022, and 2021, respectively.

Investor Relations
Caroline Paul
Gilmartin Group
ir@medavail.com

Source: MedAvail Holdings Inc.

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