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MedAvail Reports Fourth Quarter and Full Year 2021 Financial Results

03/24/2022

MISSISSAUGA, Ontario & PHOENIX--(BUSINESS WIRE)-- MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”) a technology-enabled pharmacy company, today reported financial results for the three months and full year ended December 31, 2021.

“I am excited to have joined MedAvail at a pivotal time when I believe that there is a tremendous need and a rising demand in pharmacy services for our technology and pharmacy solutions. Since joining MedAvail, my confidence in our business has only strengthened further,” said Mark Doerr, Chief Executive Officer of MedAvail. “As we look ahead to 2022, I believe that we are strongly positioned with expansion in dispensing deployments and partnerships well underway and a clear roadmap seeking to deliver profitable and sustainable growth over the long-term.”

Fourth Quarter 2021 Financial and Operational Highlights

All comparisons, unless otherwise noted, are to the three months ended December 31, 2020.

  • Total revenue was $7.3 million
  • Total revenue by segment
    • Retail Pharmacy Services revenue increased 170% to $6.8 million
    • Pharmacy Technology revenue decreased 24% to $0.4 million
  • Net loss was $12.6 million compared to a net loss of $12.1 million
  • Adjusted EBITDA loss of $10.9 million compared to $8.9 million
  • Cash, and cash equivalents of $19.7 million as of December 31, 2021

Full Year 2021 Financial and Operational Highlights

All comparisons, unless otherwise noted, are to the twelve months ended December 31, 2020.

  • Total revenue was $22.1 million
  • Total revenue by segment
    • Retail Pharmacy Services revenue increased 161% to $20.2 million
    • Pharmacy Technology revenue decreased 69% to $1.9 million. Total revenue for the third quarter of 2020 included a non-recurring benefit of $4.7 million recognized in conjunction with a commercial agreement from 2018; excluding this benefit, Pharmacy Technology revenue increased 27%.
  • 81 MedCenter total net cumulative deployments compared to 46 MedCenter total net cumulative deployments, representing 76% growth
    • 68 MedCenter total net dispensing deployments compared to 38 total MedCenter net dispensing deployments, representing 79% growth
  • Net loss was $43.8 million compared to a net loss of $26.8 million
  • Adjusted EBITDA loss of $39.6 million compared to $23.8 million

Financial Outlook

MedAvail expects total revenue for the first quarter of 2022 to be in excess of $8.8 million, which represents more than double its total revenue in the same period in 2021. The company expects adjusted gross margin improvement in the first quarter of 2022 compared to the fourth quarter of 2021.

Conference Call

MedAvail will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Thursday, March 24, 2022, to discuss its fourth quarter and full year 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.

Definition of Key Metrics

Dispensing Deployments

We define dispensing deployments as deployments 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.

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; expansion plans; margin improvement; 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 both MedAvail’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2021, and its Quarterly Report on Form 10-Q, filed with the SEC on November 9, 2021, 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 to be filed with the SEC. 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 Statements of Operations and Comprehensive Loss

(In thousands, except per-share amounts)

(Unaudited)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2021

 

2020 (1)

 

2021

 

2020 (1)

Revenue:

 

 

 

 

 

 

 

Pharmacy and hardware revenue

$

6,954

 

 

$

3,009

 

 

$

21,119

 

 

$

10,596

 

Service revenue

 

326

 

 

 

91

 

 

 

1,010

 

 

 

3,372

 

Total revenue

 

7,280

 

 

 

3,100

 

 

 

22,129

 

 

 

13,968

 

Cost of products sold and services:

 

 

 

 

 

 

 

Pharmacy and hardware cost of products sold

 

7,562

 

 

 

3,250

 

 

 

21,306

 

 

 

8,593

 

Service costs

 

80

 

 

 

96

 

 

 

506

 

 

 

212

 

Total cost of products sold and services

 

7,642

 

 

 

3,346

 

 

 

21,812

 

 

 

8,805

 

Operating expense:

 

 

 

 

 

 

 

Pharmacy operations

 

4,068

 

 

 

2,195

 

 

 

13,496

 

 

 

6,146

 

General and administrative

 

5,544

 

 

 

5,795

 

 

 

22,277

 

 

 

15,863

 

Selling and marketing

 

2,148

 

 

 

1,206

 

 

 

7,204

 

 

 

3,283

 

Research and development

 

248

 

 

 

150

 

 

 

849

 

 

 

682

 

Merger expenses

 

 

 

 

2,084

 

 

 

 

 

 

4,691

 

Total operating expense

 

12,008

 

 

 

11,430

 

 

 

43,826

 

 

 

30,665

 

Operating loss

 

(12,370

)

 

 

(11,676

)

 

 

(43,509

)

 

 

(25,502

)

Other income (loss), net

 

 

 

 

(118

)

 

 

206

 

 

 

(110

)

Interest income

 

5

 

 

 

28

 

 

 

79

 

 

 

43

 

Interest expense

 

(261

)

 

 

(330

)

 

 

(589

)

 

 

(1,241

)

Loss before income taxes

 

(12,626

)

 

 

(12,096

)

 

 

(43,813

)

 

 

(26,810

)

Income tax expense

 

 

 

 

 

 

 

(2

)

 

 

 

Net loss

$

(12,626

)

 

$

(12,096

)

 

$

(43,815

)

 

$

(26,810

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

Foreign currency translation adjustment

$

 

 

$

24

 

 

$

 

 

$

22

 

Total comprehensive loss

$

(12,626

)

 

$

(12,072

)

 

$

(43,815

)

 

$

(26,788

)

Net loss per share - basic and diluted

$

(0.38

)

 

$

(0.71

)

 

$

(1.34

)

 

$

(4.69

)

Weighted average shares outstanding - basic and diluted

 

32,852

 

 

 

17,003

 

 

 

32,656

 

 

 

5,722

 

(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 December 31, 2020

 

 

 

Current presentation

 

As previously reported

 

Change

Pharmacy operations

$

2,195

 

$

2,033

 

$

162

 

General and administrative

 

5,795

 

 

6,019

 

 

(224

)

Selling and marketing

 

1,206

 

 

1,147

 

 

59

 

Research and development

 

150

 

 

149

 

 

1

 

 

$

9,346

 

$

9,348

 

$

(2

)

 

Year Ended December 31, 2020

 

 

 

Current presentation

 

As previously reported

 

Change

Pharmacy operations

$

6,146

 

$

5,687

 

$

459

 

General and administrative

 

15,863

 

 

16,562

 

 

(699

)

Selling and marketing

 

3,283

 

 

3,043

 

 

240

 

 

$

25,292

 

$

25,292

 

$

 

MEDAVAIL HOLDINGS, INC.

Consolidated Condensed Balance Sheets

(In thousands, except share and per-share amounts)

(Unaudited)

 

 

December 31,

 

2021

 

2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

19,689

 

 

$

57,936

 

Restricted cash

 

400

 

 

 

60

 

Accounts receivable, net

 

1,189

 

 

 

1,520

 

Inventories

 

3,916

 

 

 

2,817

 

Prepaid expenses and other current assets

 

2,191

 

 

 

1,534

 

Total current assets

 

27,385

 

 

 

63,867

 

Property, plant and equipment, net

 

5,692

 

 

 

3,795

 

Right-of-use assets

 

2,538

 

 

 

1,239

 

Other assets

 

228

 

 

 

203

 

Intangible assets, net

 

2,300

 

 

 

227

 

Total assets

$

38,143

 

 

$

69,331

 

Liabilities and Shareholders’ Equity (Deficit)

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

6,740

 

 

$

4,512

 

Short-term debt

 

 

 

 

2,161

 

Deferred revenue

 

83

 

 

 

275

 

Current portion of lease obligations

 

682

 

 

 

665

 

Total current liabilities

 

7,505

 

 

 

7,613

 

Long-term debt

 

9,538

 

 

 

 

Long-term portion of lease obligations

 

2,027

 

 

 

651

 

Total liabilities

 

19,070

 

 

 

8,264

 

Commitments and contingencies

 

 

 

Stockholders' equity (deficit):

 

 

 

Common shares ($0.001 par value, 100,000,000 shares authorized, 32,902,048 and 31,816,020 shares issued and outstanding at December 31, 2021 and 2020, respectively)

 

33

 

 

 

32

 

Warrants

 

1,373

 

 

 

2,614

 

Additional paid-in-capital

 

216,685

 

 

 

213,624

 

Accumulated other comprehensive loss

 

(6,928

)

 

 

(6,928

)

Accumulated deficit

 

(192,090

)

 

 

(148,275

)

Total shareholders’ equity

 

19,073

 

 

 

61,067

 

Total liabilities and shareholders’ equity

$

38,143

 

 

$

69,331

 

MEDAVAIL HOLDINGS, INC.

Supplemental Financial Information - Segments

(In thousands)

(Unaudited)

 

 

Retail Pharmacy
Services

 

Pharmacy
Technology

 

Total

Three Months Ended December 31, 2021

 

 

 

 

 

Revenue:

 

 

 

 

 

Pharmacy and hardware revenue:

 

 

 

 

 

Retail pharmacy revenue

$

6,846

 

 

$

 

 

$

6,846

 

Hardware

 

 

 

 

 

 

 

 

Subscription

 

 

 

 

108

 

 

 

108

 

Total pharmacy and hardware revenue

 

6,846

 

 

 

108

 

 

 

6,954

 

Service revenue:

 

 

 

 

 

Software integration

 

 

 

 

 

 

 

 

Software

 

 

 

 

134

 

 

 

134

 

Maintenance and support

 

 

 

 

47

 

 

 

47

 

Installation

 

 

 

 

 

 

 

 

Professional services and other

 

 

 

 

145

 

 

 

145

 

Total service revenue

 

 

 

 

326

 

 

 

326

 

Total revenue

 

6,846

 

 

 

434

 

 

 

7,280

 

Cost of products sold and services (1)

 

6,901

 

 

 

741

 

 

 

7,642

 

Gross profit

$

(55

)

 

$

(307

)

 

 

(362

)

(1) The pharmacy technology segment includes a provision for inventory of $626 thousand.

 

Retail Pharmacy
Services

 

Pharmacy
Technology

 

Total

Three Months Ended December 31, 2020

 

 

 

 

 

Revenue:

 

 

 

 

 

Pharmacy and hardware revenue:

 

 

 

 

 

Retail pharmacy revenue

$

2,532

 

 

$

 

 

$

2,532

 

Hardware

 

 

 

 

353

 

 

 

353

 

Subscription

 

 

 

 

124

 

 

 

124

 

Total pharmacy and hardware revenue

 

2,532

 

 

 

477

 

 

 

3,009

 

Service revenue:

 

 

 

 

 

Software integration

 

 

 

 

 

 

 

 

Software

 

 

 

 

20

 

 

 

20

 

Maintenance and support

 

 

 

 

19

 

 

 

19

 

Installation

 

 

 

 

27

 

 

 

27

 

Professional services and other

 

 

 

 

25

 

 

 

25

 

Total service revenue

 

 

 

 

91

 

 

 

91

 

Total revenue

 

2,532

 

 

 

568

 

 

 

3,100

 

Cost of products sold and services (1)

 

2,685

 

 

 

661

 

 

 

3,346

 

Gross profit

$

(153

)

 

$

(93

)

 

$

(246

)

(1) The retail pharmacy services and pharmacy technology segments include provisions for inventory of $173 thousand and $179 thousand, respectively.

MEDAVAIL HOLDINGS, INC.

Supplemental Financial Information - Segments

(In thousands)

(Unaudited)

 

 

Retail Pharmacy
Services

 

Pharmacy
Technology

 

Total

Year Ended December 31, 2021

 

 

 

 

 

Revenue:

 

 

 

 

 

Pharmacy and hardware revenue:

 

 

 

 

 

Retail pharmacy revenue

$

20,203

 

$

 

$

20,203

Hardware

 

 

 

470

 

 

470

Subscription

 

 

 

446

 

 

446

Total pharmacy and hardware revenue

 

20,203

 

 

916

 

 

21,119

Service revenue:

 

 

 

 

 

Software integration

 

 

 

 

 

Software

 

 

 

259

 

 

259

Maintenance and support

 

 

 

161

 

 

161

Installation

 

 

 

39

 

 

39

Professional services and other

 

 

 

551

 

 

551

Total service revenue

 

 

 

1,010

 

 

1,010

Total revenue

 

20,203

 

 

1,926

 

 

22,129

Cost of products sold and services (1)

 

20,031

 

 

1,781

 

 

21,812

Gross profit

$

172

 

$

145

 

$

317

(1) The pharmacy technology segment includes a provision for inventory of $626 thousand.

 

Retail Pharmacy
Services

 

Pharmacy
Technology (1)

 

Total

Year Ended December 31, 2020

 

 

 

 

 

Revenue:

 

 

 

 

 

Pharmacy and hardware revenue:

 

 

 

 

 

Retail pharmacy revenue

$

7,728

 

 

$

 

$

7,728

Hardware

 

 

 

 

2,401

 

 

2,401

Subscription

 

 

 

 

467

 

 

467

Total pharmacy and hardware revenue

 

7,728

 

 

 

2,868

 

 

10,596

Service revenue:

 

 

 

 

 

Software integration

 

 

 

 

3,168

 

 

3,168

Software

 

 

 

 

44

 

 

44

Maintenance and support

 

 

 

 

58

 

 

58

Installation

 

 

 

 

55

 

 

55

Professional services and other

 

 

 

 

47

 

 

47

Total service revenue

 

 

 

 

3,372

 

 

3,372

Total revenue

 

7,728

 

 

 

6,240

 

 

13,968

Cost of products sold and services (2)

 

7,744

 

 

 

1,061

 

 

8,805

Gross profit

$

(16

)

 

$

5,179

 

$

5,163

(1) Includes $1.5 million of hardware sales and $3.2 million of software integration sales associated with a non-recurring commercial agreement.
(2) The retail pharmacy services and pharmacy technology segments include provisions for inventory of $250 thousand and $179 thousand, respectively.

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 a commercial agreement, inventory adjustment, 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.

Reconciliation of GAAP to Non-GAAP Measures

(In thousands)

(unaudited)

 

 

Three Months Ended December 31,

 

Years Ended December 31,

 

2021

 

2020

 

2021

 

2020

Net loss

(12,626

)

 

(12,096

)

 

(43,815

)

 

(26,810

)

Adjustments to calculate EBITDA:

 

 

 

 

 

 

 

Interest income

(5

)

 

(28

)

 

(79

)

 

(43

)

Interest expense

261

 

 

330

 

 

589

 

 

1,241

 

Income tax expense

 

 

 

 

2

 

 

 

Depreciation and amortization (1)

569

 

 

298

 

 

1,827

 

 

1,089

 

EBITDA

(11,801

)

 

(11,496

)

 

(41,476

)

 

(24,523

)

Adjustments as follows:

 

 

 

 

 

 

 

Inventory adjustment (2)

626

 

 

352

 

 

626

 

 

429

 

Non-recurring commercial agreement (3)

 

 

 

 

 

 

(4,729

)

Merger expenses

 

 

2,084

 

 

 

 

4,691

 

Share-based compensation expense

257

 

 

155

 

 

1,205

 

 

380

 

Adjusted EBITDA

(10,918

)

 

(8,905

)

 

(39,645

)

 

(23,752

)

(1) Excludes $203 thousand and $750 thousand of operating lease amortization for the three months and year ended December 31, 2021, respectively.
(2) Includes inventory cost adjustments.
(3) The year ended December 31, 2020 includes $1.5 million of hardware sales and $3.2 million of software integration revenue associated with a non-recurring commercial agreement.

Investor Relations
Caroline Paul
Gilmartin Group
ir@medavail.com

Source: MedAvail Holdings Inc.

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