OptimizeRx Corp. (Nasdaq: OPRX), a leading provider of digital
health solutions for life science companies, physicians and
patients, reported results for the fourth quarter and full year
ended December 31, 2020. Quarterly and full year comparisons are to
the same year-ago period.
Financial Highlights
- Revenue in the fourth quarter of 2020 increased 123% to a
record $16.4 million, with the full year of 2020 up 76% to a record
$43.3 million.
- Gross profit in the fourth quarter of 2020 increased 92% to
$8.6 million.
- GAAP net income totaled $1.4 million or $0.08 per diluted share
in the fourth quarter.
- Non-GAAP net income in the fourth quarter totaled $2.7 million
or $0.16 per diluted share (see definition of this non-GAAP measure
and reconciliation to GAAP, below).
- Cash and cash equivalents totaled $10.5 million at December 31,
2020. Subsequent to the end of the fourth quarter, the company
raised approximately $71 million in an equity offering.
Operational Highlights
- Finished the year with a pipeline of more than $180 million,
with more than $50 million in enterprise deals.
- Enhanced the company’s point-of-care platform with launch of
AI-powered real-world evidence solution, resulting in the accurate
delivery of multiple messaging solutions to clinicians at critical
points in a patient's care journey.
- Recognized by Deloitte as one of the top 500 fastest growing
companies in North America.
- Company’s virtual communications solutions, TelaRep™, was
recognized as one of the most innovative solutions for life science
companies by PM360 Magazine.
- Completed the integration of previous acquisitions in patient
engagement and enhanced the leadership and commercial team to
accelerate growth.
- Expanded direct-to-patient reach by partnering with Epion
Health, a leader in digital patient engagement solutions, providing
patients with direct access to savings programs sponsored by life
science companies.
- Joined forces with Komodo Health, a data-driven healthcare
software company, to use automated intelligence to seamlessly
deliver point-of-care messaging.
Q4 2020 Financial Summary
Total revenue in the fourth quarter of 2020 increased 123% to a
record $16.4 million versus $7.4 million in the same year-ago
quarter. The quarterly increase was due to increases in sales in
the company’s messaging and patient engagement solutions.
Gross margin decreased to 52.4% from 60.6% in the year-ago
quarter, with the decrease related to a change in solution mix.
Operating expenses totaled $7.2 million, up from $6.8 million in
the same year-ago quarter. The increase was due to the company’s
efforts to expand its solutions and build out its organization for
future growth.
Net income on a GAAP basis was $1.4 million or $0.08 per diluted
share, as compared to a net loss of $2.0 million or $(0.14) per
share in the fourth quarter of 2019.
Non-GAAP net income was $2.7 million or $0.16 per diluted share,
compared to non-GAAP net loss of $0.4 million or $(0.03) per share
in the same year-ago period (see definition of this non-GAAP
measure and reconciliation to GAAP, below).
Cash and cash equivalents totaled $10.5 million at December 31,
2020, as compared to $12.0 million at September 30, 2020. The
decrease was primarily due to cash used for operating activities.
In February 2021, the company raised approximately $71 million in a
public equity offering.
Full Year 2020 Financial Summary
Total revenue in 2020 increased 76% to a record $43.3 million
from $24.6 million in 2019. The increase was due to a shift to
enterprise contracts, engagement with additional pharmaceutical
brands, greater distribution network and strong growth in the
company’s messaging solutions. The company expects continued strong
growth in 2021 resulting from the foundation it laid in 2019 and
2020.
Gross margin decreased to 55.7% in 2020 as compared to 62.8% in
2019. The decrease was due to a shift in solution mix, including an
increase in the company’s core messaging revenues which have higher
revenue share percentages. The company expects gross margins in the
range of 56% to 58% in 2021.
Operating expenses totaled $26.2 million, up from $19.1 million
in 2019. The increase was largely due to scaling the company’s
operations to support continued revenue growth, including
additional staffing.
Net loss on a GAAP basis was $2.2 million or $(0.15) per share,
improving from a net loss of $3.1 million or $(0.23) per share in
2019.
Non-GAAP net income was $3.2 million or $0.20 per diluted share,
compared to non-GAAP net income of $0.9 million or $0.07 per share
in 2019.
The company expects to file its Form 10-K in the second week of
March.
Management Commentary
“In Q4, we more than doubled our top line and generated positive
net income largely as the result of strong organic growth,” said
OptimizeRx CEO, William Febbo. “Over the last year we have
continued to shift our business model towards enterprise-level
engagements with recurring revenue streams. Client renewal rates at
the end of 2020 reached all-time highs, as we added 60 new brands
to our platform.
“These results also reflect how we have made great strides with
innovation during the pandemic, and particularly with the
introduction of TelaRep™, our new virtual communication solution.
This cloud-based platform enables providers to reach the right
pharma contact from within their EHR workflow and with just one
click. TelaRep helps eliminate the communication gap created by
today’s limited opportunities for face-to-face interaction, a
growing challenge even before the pandemic.
“In addition to existing solutions on the platform, we are now
leveraging real-world data to deliver real-time information at the
point-of-care with our new AI-powered real-world evidence solution.
The sophisticated proprietary algorithms that power this solution
also enable us to derive additional revenue from our existing
systems.
“Of the $180 million in pipeline, we had about 46 enterprise
engagements as we came into 2021 valued at more than $50 million --
a significant increase over this time last year. We believe our
pipeline growth has been driven by a pandemic-accelerated,
permanent shift to more digital enablement. For these potential
engagements, we expect to realize our traditional annual closing
rate of between 35% - 50% over the course of the next year.
“In 2021, we expect continued strong growth resulting from the
solid foundation we’ve laid over the last two years. As we continue
to invest in innovations and enhance the scalability of our
technology and commercial teams, we believe we have the momentum,
at least aspirationally, to reach a $100 million revenue run rate
on just our core business.
“Deloitte recognized OptimizeRx as one of the top 500 fastest
growing companies in North America, and we expect to remain on this
list.”
Conference Call
OptimizeRx management will host the presentation, followed by a
question-and-answer period.
Date: Wednesday, February 24, 2021Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)Toll-free dial-in number:
1-800-437-2398International dial-in number:
1-323-289-6576Conference ID: 9166514
Please call the conference telephone number five minutes prior
to the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact CMA at 1-949-432-7566.
A replay of the call will be available after 7:30 p.m. Eastern
time on the same day through March 17, 2021, as well as available
for replay via the Investors section of the OptimizeRx website at
www.optimizerx.com/investors.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 9166514
Definition and Use of Non-GAAP Financial
MeasuresThis earnings release includes a presentation of
non-GAAP net income (loss) and non-GAAP earnings (loss) per share
or non-GAAP EPS, both of which are non-GAAP financial measures.
The company defines non-GAAP net income (loss) as GAAP net
income (loss) with an adjustment to add back depreciation,
amortization, stock-based compensation, acquisition expenses,
income or loss related to the fair value of contingent
consideration, and deferred income taxes. Non-GAAP EPS is defined
as non-GAAP net income (loss) divided by the number of weighted
average shares outstanding on a basic and diluted basis. The
company has provided non-GAAP financial measures to aid investors
in better understanding its performance. Management believes that
these non-GAAP financial measures provide additional insight into
the operations and cashflow of the company.
Because of varying available valuation methodologies, subjective
assumptions and the variety of equity instruments that can impact a
company’s non-cash operating expenses, management believes that
providing non-GAAP financial measures that excludes non-cash
expenses allows for meaningful comparisons between the company’s
core business operating results and those of other companies, as
well as provides an important tool for financial and operational
decision making and for evaluating the company’s own core business
operating results over different periods of time.
The company’s non-GAAP net income (loss) and non-GAAP EPS
measures may not provide information that is directly comparable to
that provided by other companies in the company’s industry, as
other companies in the industry may calculate such non-GAAP
financial results differently. The company’s non-GAAP net income
(loss) and non-GAAP EPS are not measurements of financial
performance under GAAP and should not be considered as an
alternative to operating income or as an indication of operating
performance or any other measure of performance derived in
accordance with GAAP. The company does not consider these non-GAAP
measures to be substitutes for or superior to the information
provided by its GAAP financial results.
The table, “Reconciliation of non-GAAP to GAAP Financial
Measures,” included below, provides a reconciliation of non-GAAP
net income (loss) and non-GAAP EPS for the three months and twelve
months ended December 31, 2020 and 2019.
About OptimizeRxOptimizeRx is a digital
health company that provides communications solutions for life
science companies, physicians and patients. Connecting over half of
healthcare providers in the U.S. and millions of patients
through a proprietary network, the OptimizeRx digital
health platform helps patients afford and stay on medications. The
platform unlocks new patient and physician touchpoints for life
science companies along the patient journey, from point-of-care, to
retail pharmacy, through mobile patient engagement.
For more information, follow the company
on Twitter, LinkedIn or
visit www.optimizerx.com.
Important Cautions Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the definition of Section 27A of the Securities Act of 1933, as
amended, and such as in section 21E of the Securities Act of 1934,
as amended. These forward-looking statements should not be used to
make an investment decision. The words 'estimate,' 'possible' and
'seeking' and similar expressions identify forward-looking
statements, which speak only as to the date the statement was made.
The company undertakes no obligation to publicly update or revise
any forward-looking statements, whether because of new information,
future events, or otherwise. Forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot
be predicted, or quantified. Future events and actual results could
differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements. The risks and
uncertainties to which forward-looking statements are subject
include, but are not limited to, the effect of government
regulation, competition, and other material risks.
OptimizeRx ContactDoug Baker, CFOTel (248)
651-6568
x807dbaker@optimizerx.com
Media Relations Contact Maira Alejandra,
Media Relations ManagerTel (754)
245-7070 malejandra@optimizerx.com
Investor Relations ContactRon Both, CMATel
(949) 432-7557Email Contact
OPTIMIZERX
CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
December 31, 2020 |
|
|
December 31, 2019 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
10,516,776 |
|
|
$ |
18,852,680 |
|
Accounts receivable, net |
|
17,885,705 |
|
|
|
7,418,025 |
|
Prepaid expenses |
|
4,456,611 |
|
|
|
871,043 |
|
Total Current Assets |
|
32,859,092 |
|
|
|
27,141,748 |
|
Property and equipment, net |
|
148,854 |
|
|
|
176,014 |
|
Other Assets |
|
|
|
|
|
|
|
Goodwill |
|
14,740,031 |
|
|
|
14,740,031 |
|
Technology assets, net |
|
5,251,822 |
|
|
|
6,238,453 |
|
Patent rights, net |
|
2,349,570 |
|
|
|
2,550,587 |
|
Right of use assets, net |
|
445,974 |
|
|
|
559,863 |
|
Other intangible assets, net |
|
4,519,552 |
|
|
|
5,151,102 |
|
Security deposits and other assets |
|
12,859 |
|
|
|
80,727 |
|
Total Other Assets |
|
27,319,808 |
|
|
|
29,320,763 |
|
TOTAL ASSETS |
$ |
60,327,754 |
|
|
$ |
56,638,525 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Accounts payable – trade |
$ |
618,250 |
|
|
$ |
492,995 |
|
Accrued expenses |
|
2,420,361 |
|
|
|
1,800,635 |
|
Revenue share payable |
|
4,969,868 |
|
|
|
1,618,438 |
|
Current portion of lease liabilities |
|
123,220 |
|
|
|
115,431 |
|
Contingent purchase price payable |
|
1,610,813 |
|
|
|
1,500,000 |
|
Deferred revenue |
|
285,795 |
|
|
|
580,014 |
|
Total Current Liabilities |
|
10,028,307 |
|
|
|
6,107,513 |
|
Non-current Liabilities |
|
|
|
|
|
|
|
Lease liabilities, net of current portion |
|
325,533 |
|
|
|
448,753 |
|
Contingent purchase price payable, net of current portion |
|
- |
|
|
|
5,220,000 |
|
Total Non-Current Liabilities |
|
325,533 |
|
|
|
5,668,753 |
|
Total Liabilities |
|
10,353,840 |
|
|
|
11,776,266 |
|
Commitments and contingencies |
|
- |
|
|
|
- |
|
Stockholders’ Equity |
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized,
none issued and outstanding at December 31, 2020 and 2019 |
|
- |
|
|
|
- |
|
Common stock, $0.001 par value, 166,666,667 shares authorized,
15,223,340 and 14,609,579 shares issued and outstanding at December
31, 2020 and 2019, respectively |
|
15,223 |
|
|
|
14,601 |
|
Additional paid-in-capital |
|
85,590,428 |
|
|
|
78,272,268 |
|
Accumulated deficit |
|
(35,631,737 |
) |
|
|
(33,424,610 |
) |
Total Stockholders’ Equity |
|
49,973,914 |
|
|
|
44,862,259 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
60,327,754 |
|
|
$ |
56,638,525 |
|
|
|
|
|
|
|
|
|
OPTIMIZERx
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
For the quarter ended December 31,2020 (Unaudited) |
|
|
|
For the quarter ended December 31,2019 (Unaudited) |
|
|
|
For the year ended December31, 2020 (Unaudited) |
|
|
For the year ended December 31,2019 |
|
Revenue |
$ |
16,426,301 |
|
|
$ |
7,379,782 |
|
|
$ |
43,313,323 |
|
|
$ |
24,598,274 |
|
Cost of revenues |
|
7,822,280 |
|
|
|
2,906,933 |
|
|
|
19,207,902 |
|
|
|
9,158,699 |
|
Gross margin |
|
8,604,021 |
|
|
|
4,472,849 |
|
|
|
24,105,421 |
|
|
|
15,439,575 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
781,221 |
|
|
|
490,578 |
|
|
|
3,172,840 |
|
|
|
2,260,298 |
|
Depreciation and amortization |
|
512,005 |
|
|
|
536,859 |
|
|
|
2,075,888 |
|
|
|
1,282,787 |
|
Other general and administrative expenses |
|
5,954,327 |
|
|
|
5,763,874 |
|
|
|
20,992,012 |
|
|
|
15,590,054 |
|
Total operating expenses |
|
7,247,553 |
|
|
|
6,791,311 |
|
|
|
26,240,740 |
|
|
|
19,133,139 |
|
Income (loss) from operations |
|
1,356,468 |
|
|
|
(2,318,462 |
) |
|
|
(2,135,319 |
) |
|
|
(3,693,564 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
698 |
|
|
|
95,722 |
|
|
|
68,582 |
|
|
|
288,028 |
|
Change in fair value of contingent consideration |
|
|
|
|
|
(660,000 |
) |
|
|
(140,390 |
) |
|
|
(635,000 |
) |
Total other income (expense) |
|
698 |
|
|
|
(564,278 |
) |
|
|
(71,808 |
) |
|
|
(346,972 |
) |
Income (loss) before provision for income taxes |
|
1,357,166 |
|
|
|
(2,882,740 |
) |
|
|
(2,207,127 |
) |
|
|
(4,040,536 |
) |
Income tax benefit |
|
- |
|
|
|
897,960 |
|
|
|
- |
|
|
|
897,960 |
|
Net income (loss) |
$ |
1,357,166 |
|
|
$ |
(1,987,780 |
) |
|
$ |
(2,207,127 |
) |
|
$ |
(3,142,576 |
) |
Weighted average number of shares
outstanding - basic |
|
15,127,425 |
|
|
|
14,548,910 |
|
|
|
14,827,923 |
|
|
|
13,387,863 |
|
Weighted average number of shares
outstanding - diluted |
|
16,311,904 |
|
|
|
14,548,910 |
|
|
|
14,827,923 |
|
|
|
13,387,863 |
|
Net income (loss) per share –
basic |
$ |
0.09 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.23 |
) |
Net income (loss) per share –
diluted |
$ |
0.08 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
|
$ |
(0.23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPTIMIZERx
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(UNAUDITED)
|
For theyear ended December 31,2020 |
|
|
For theyear endedDecember 31,2019 |
|
CASH FLOWS FROM
OPERATING ACTIVITIES: |
|
|
|
|
|
Net loss |
$ |
(2,207,127 |
) |
|
$ |
(3,142,576 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
1,971,083 |
|
|
|
1,175,131 |
|
Noncash lease expense |
|
104,805 |
|
|
|
107,656 |
|
Increase in bad debt reserve |
|
200,000 |
|
|
|
80,000 |
|
Stock-based compensation |
|
3,172,840 |
|
|
|
2,260,298 |
|
Income tax benefit |
|
|
|
|
|
(897,960 |
) |
Change in fair value of contingent consideration |
|
140,390 |
|
|
|
635,000 |
|
Changes in: |
|
|
|
|
|
|
|
Accounts receivable |
|
(10,667,680 |
) |
|
|
(628,830 |
) |
Prepaid expenses and other assets |
|
(3,517,700 |
) |
|
|
(343,838 |
) |
Accounts payable |
|
125,255 |
|
|
|
(46,249 |
) |
Revenue share payable |
|
3,351,430 |
|
|
|
(290,178 |
) |
Accrued expenses and other |
|
1,416,884 |
|
|
|
(432,075 |
) |
Change in operating lease liabilities |
|
(106,347 |
) |
|
|
(106,564 |
) |
Deferred revenue |
|
(294,219 |
) |
|
|
(30,611 |
) |
NET CASH USED IN
OPERATING ACTIVITIES |
|
(6,310,386 |
) |
|
|
(1,660,796 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Purchases of property and equipment |
|
(68,041 |
) |
|
|
(87,717 |
) |
Acquisition of intangible assets, including intellectual property
rights |
|
(11,932 |
) |
|
|
(1,500,000 |
) |
Capitalized software development costs |
|
(44,752 |
) |
|
|
- |
|
Cash paid in acquisition, net of cash acquired |
|
- |
|
|
|
(8,994,369 |
) |
NET CASH USED IN
INVESTING ACTIVITIES |
|
(124,725 |
) |
|
|
(10,582,086 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Proceeds from issuance of common stock, net of offering costs |
|
- |
|
|
|
21,303,826 |
|
Proceeds from exercise of stock options |
|
2,488,394 |
|
|
|
877,702 |
|
Payment of contingent consideration |
|
(4,389,187 |
) |
|
|
- |
|
NET CASH PROVIDED BY
(USED IN) FINANCING ACTIVITIES |
|
(1,900,793 |
) |
|
|
22,181,528 |
|
NET INCREASE (DECREASE
IN) CASH AND CASH EQUIVALENTS |
|
(8,335,904 |
) |
|
|
9,938,646 |
|
CASH AND CASH
EQUIVALENTS – BEGINNING OF PERIOD |
|
18,852,680 |
|
|
|
8,914,034 |
|
CASH AND CASH
EQUIVALENTS – END OF PERIOD |
$ |
10,516,776 |
|
|
$ |
18,852,680 |
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
- |
|
|
$ |
- |
|
Cash paid for income taxes |
$ |
- |
|
|
$ |
- |
|
NON-CASH INVESTING AND
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Lease liabilities arising from right of use assets |
|
- |
|
|
|
207,559 |
|
Acquisition liabilities paid in stock |
$ |
1,6,557,548 |
|
|
$ |
|
|
Shares issued in connection with acquisitions |
$ |
|
|
|
$ |
5,107,793 |
|
Non-cash effect of cumulative adjustments to accumulated
deficit |
$ |
|
|
|
$ |
3,229 |
|
|
|
|
|
|
|
|
|
OPTIMIZERx
CORPORATIONReconciliation of non-GAAP to GAAP
Financial Measures(Unaudited)
|
For the Three Months |
|
For the Year |
|
Ended December 31, |
|
Ended December 31, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income (loss) |
|
$1,357,166 |
|
|
$(1,984,780 |
) |
|
$(2,207,127 |
) |
|
$(3,142,576 |
) |
Depreciation and amortization |
|
512,005 |
|
|
|
536,859 |
|
|
|
2,075,888 |
|
|
|
1,282,787 |
|
Stock-based compensation |
|
781,221 |
|
|
|
490,578 |
|
|
|
3,172,840 |
|
|
|
2,260,298 |
|
Acquisition Expenses |
|
- |
|
|
|
799,623 |
|
|
|
- |
|
|
|
799,623 |
|
Income or loss related to the
fair value of contingent consideration |
|
- |
|
|
|
660,420 |
|
|
|
140,390 |
|
|
|
635,000 |
|
Deferred Income Taxes |
|
- |
|
|
|
(897,960 |
) |
|
|
- |
|
|
|
(897,960 |
) |
Non-GAAP net income
(loss) |
|
$2,650,392 |
|
|
$(395,260 |
) |
|
$3,181,991 |
|
|
$937,172 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) per
share |
|
|
|
|
|
|
|
|
|
Basic |
|
$0.18 |
|
|
$ |
(0.03 |
) |
|
$0.21 |
|
|
$ |
0.07 |
|
Diluted |
|
$0.16 |
|
|
$ |
(0.03 |
) |
|
$0.20 |
|
|
$ |
0.07 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
15,127,425 |
|
|
|
14,548,910 |
|
|
|
14,827,923 |
|
|
|
13,387,863 |
|
Diluted |
|
16,311,904 |
|
|
|
14,548,910 |
|
|
|
15,640,050 |
|
|
|
14,339,005 |
|
|
|
|
|
|
|
|
|
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