CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF,
Frankfurt: 6PH) (the “
Company” or
“
CloudMD”), a healthcare technology company
revolutionizing the delivery of care, announced its financial
results for the first quarter ended March 31, 2021. All financial
information is presented in Canadian dollars unless otherwise
indicated.
Dr. Essam Hamza, CEO of CloudMD
commented, “We are excited to share our record Q1 2021 financial
results that continue to improve quarter over quarter. Q1 was a
transformative period for CloudMD, as we closed 5 acquisitions,
adding $13 million in annualized revenue and establishing the
foundation for our Enterprise Health Solutions division. I am very
proud of the strategic roadmap we have built and the team’s ability
to execute on our growth strategy. We identified key acquisition
targets that were synergistic to our overall vision and we remain
focused on building a complete healthcare ecosystem, providing
connected, holistic care. We continue to integrate all of our
capabilities into one comprehensive platform, which is the
foundation for scale and expansion. Within our Enterprise Health
Solutions division, we have already seen significant early adoption
and through cross-selling opportunities, attained over $5 million
in new multi-year contracts in the first quarter. Equally exciting
is that CloudMD already has a revenue run rate of over $120
million, and through highly profitable acquisitions coupled with
organic growth and realization of cost synergies, we expect to be
profitable in the second half of 2021.”
First Quarter 2021 Financial Highlights
- Q1 2021 revenue was $8.8 million,
compared to $5.8 million in Q4 2020 and $3.1 million in Q1 2020.
The increase is primarily attributable to acquisition growth with 5
acquisitions completed in the quarter, and 11 acquisitions
completed in the last twelve months. Excluding the impact of Q1
business acquisitions, the Company achieved organic growth from its
existing businesses.
- Q1 2021 gross margin was 41%,
compared to 40% in Q4 2020 and 37% in Q1 2020. The increase is
primarily attributable to revenue mix where higher margin revenues
from Enterprise Health Solutions (“EHS”) and
Digital Services made up a stronger percentage of overall
revenues.
- Net comprehensive loss attributable
to equity holders of the Company in Q1 2021 was $5.3 million or
$0.03 per share, compared to $5.2 million or $0.04 per share in Q4
2020 and $1.6 million or $0.02 per share in Q1 2020. In the
quarter, the Company completed numerous strategic initiatives,
including the completion of 5 acquisitions in the quarter and
raising $58.2 million in gross proceeds from a bought deal short
form prospectus offering, which the Company expects will contribute
to strong future growth of the Company.
- Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization (“Adjusted
EBITDA”) was a loss of $1.5 million in Q1 2021, compared
to a loss of $1.5 million in Q4 2020 and a loss of $0.8 million in
Q1 2020. The Adjusted EBITDA calculation adjusts for share-based
compensation, costs related to financing, acquisitions,
integration, litigation including associated loss provisions, and
change in fair value of contingent consideration. Adjusted EBITDA
is used by management to evaluate the Company’s cash operating
performance, and a complete definition and calculation are provided
further below.
- Cash and cash equivalents were
$99.2 million as at March 31, 2021, compared to $59.7 million at
December 31, 2020. In Q1 2021, the Company raised gross proceeds of
$58.2 million in a bought deal short form prospectus offering in
March 2021 and the Company’s current cash balance is approximately
$95 million.
First Quarter & Subsequent
Highlights
- During January 2021, the Company
closed the previously announced acquisitions of HumanaCare, Medical
Confidence and Canadian Medical Directory, strengthening the
Company’s EHS division by adding a leading Employee Assistance
Program and healthcare navigation platform.
- On February 8, 2021 the Company
closed the acquisition of 51% of West Mississauga Medical Clinic,
expanding the Company’s hybrid clinic footprint in Ontario.
- On February 16, 2021, the Company
announced that it signed a binding term sheet to acquire
VisionPros, a rapidly growing digital eyecare platform with a
robust suite of digital vision care tools.
- In March 2021, the Company closed
the short form prospectus offering, on a bought deal basis,
including the full over-allotment option for total gross proceeds
of $58.2 million.
- On March 18, 2021, the Company
provided an update on the rapid growth of its Enterprise Health
Solutions division, realizing over $5 million in new multi-year
contracts since the beginning of 2021.
- On March 23, 2021, the Company
announced that it closed the acquisition of IDYA4, the technology
platform used to integrate all of our healthcare solutions,
providing a fully automated, seamless patient experience.
- On April 6, 2021, the Company
announced that it closed the acquisition of Aspiria, adding another
leading Employee and Student-focused assistance program to the
Company’s EHS division.
- On April 8, 2021, the Company
announced that it entered into a binding term sheet to acquire
Oncidium, creating one of the largest providers to the employer
market in Canada.
- On May 12, 2021, the Company
announced that it closed the acquisition of Rxi, a proprietary
specialty drug management and patient support platform.
Outlook
The Company is focused on revolutionizing the
healthcare industry by leveraging technology to digitalize its
delivery in providing more efficient access to care and achieving
better health outcomes. CloudMD is integrating its health
technology solutions to build one, connected healthcare ecosystem
that addresses all points of a patient’s care from one platform.
The Company remains on track to launch a fully automated, connected
solution later in 2021. This connected platform is the foundation
for scale and growth and the Company will continue expanding its
footprint across North America and strategically in Europe.
CloudMD’s current revenue run rate is over $120
million which does not take into consideration any expected organic
growth or cross-selling synergies. CloudMD expects to see continued
organic growth across all divisions of its business largely due to
the integration of its health technology solutions and
cross-selling synergies in the EHS division.
The Company has a strong cash position with
approximately $95 million on hand, and approximately $35 million
remaining after the closing of the acquisitions of VisionPros and
Oncidium, which both are expected to close in June 2021. With a
strong balance sheet, CloudMD is able to seek debt financing
options to conserve cash and equity. The Company is on track to be
profitable and expects to be Adjusted EBITDA-positive in the second
half of 2021.
CloudMD will continue to focus on delivering
meaningful shareholder value by executing on its growth strategy
through accretive, synergistic acquisitions, achieving organic
growth across all divisions, and the full integration of its
healthcare solutions to provide one, connected platform that
addresses all points of care for patients.
Selected Financial
Information
All results were prepared in accordance with
International Financial Reporting Standards (“IFRS”) as issued by
the International Accounting Standards Board.
(in thousands of Canadian dollars) |
Three months ended |
|
March 31, |
|
2021 |
2020 |
(%) |
Revenue |
$ |
8,775 |
|
$ |
3,057 |
|
187 |
% |
Cost of sales |
|
(5,184 |
) |
|
(1,933 |
) |
168 |
% |
Gross
profit (1) |
|
3,591 |
|
|
1,124 |
|
219 |
% |
Gross
margin |
|
40.9 |
% |
|
36.8 |
% |
|
|
|
|
|
|
|
Expenses |
|
9,132 |
|
|
2,765 |
|
230 |
% |
Loss
before other items |
|
(5,541 |
) |
|
(1,641 |
) |
238 |
% |
Other items, taxes, non-controlling interest |
|
254 |
|
|
18 |
|
|
Net
comprehensive loss attributable to equity holders of the
Company |
|
(5,307 |
) |
|
(1,623 |
) |
227 |
% |
Loss per share, basic and diluted |
$ |
(0.03 |
) |
$ |
(0.02 |
) |
50 |
% |
(1) Gross profit is a non-GAAP
measure as described in the Non-GAAP Financial Measures section of
this News Release.
(in thousands of Canadian dollars) |
Three months ended |
|
March 31, |
|
2021 |
2020 |
(%) |
Net comprehensive loss attributable to equity holders of
the Company |
$ |
(5,307 |
) |
$ |
(1,623 |
) |
227 |
% |
Add: |
|
|
|
|
|
Interest
and accretion expense |
|
92 |
|
|
61 |
|
50 |
% |
Income
taxes |
|
40 |
|
|
- |
|
100 |
% |
Depreciation and amortization |
|
689 |
|
|
202 |
|
242 |
% |
EBITDA(1) for the
period |
|
(4,486 |
) |
|
(1,360 |
) |
230 |
% |
Share-based compensation |
|
1,595 |
|
|
445 |
|
258 |
% |
Financing-related costs |
|
749 |
|
|
65 |
|
1052 |
% |
Acquisition-related and integration costs, net |
|
812 |
|
|
20 |
|
4053 |
% |
Litigation costs and loss provision |
|
103 |
|
|
- |
|
100 |
% |
Change in fair value of contingent consideration |
|
(315 |
) |
|
- |
|
-100 |
% |
Adjusted EBITDA for the period |
$ |
(1,542 |
) |
$ |
(830 |
) |
86 |
% |
(1) EBITDA is a non-GAAP
measure as described in the Non-GAAP Financial Measures section of
this News Release.
First Quarter Earnings Conference
Call
CloudMD invites all interested parties to join
the conference call or webinar:
CloudMD Q1 2021 Earnings CallDate: Today, May
27, 2021Time: 2:00 pm PT / 5:00 pm ET
Toll-Free Dial-In Number: (833) 562-0117 International
Dial-In Number: (661) 567-1009Conference
ID: 7655837
Webcast
Link: https://edge.media-server.com/mmc/p/ozdza9aq
Financial Statements and Management’s
Discussion and Analysis
This news release should be read in conjunction
with the Company’s condensed interim consolidated financial
statements and related notes, and management’s discussion and
analysis for the three months ended March 31, 2021 and 2020, copies
of which can be found at www.sedar.com.
Non-GAAP Financial Measures
In addition to the results reported in
accordance with IFRS, the Company uses various non-GAAP financial
measures, which are not recognized under IFRS, as supplemental
indicators of the Company’s operating performance and financial
position. These non-GAAP financial measures are provided to enhance
the user’s understanding of the Company’s historical and current
financial performance and its prospects for the future. Management
believes that these measures provide useful information in that
they exclude amounts that are not indicative of the Company’s core
operating results and ongoing operations and provide a more
consistent basis for comparison between quarters and years. Details
of such non-GAAP financial measures and how they are derived are
provided below as well as in conjunction with the discussion of the
financial information reported.
Since non-GAAP financial measures do not have
any standardized meanings prescribed by IFRS, other companies may
calculate these non-IFRS measures differently and our non-GAAP
financial measures may not be comparable to similar titled measures
of other companies. Accordingly, investors are cautioned not to
place undue reliance on them and are also urged to read all IFRS
accounting disclosures presented in the audited consolidated
financial statements and the accompanying notes for the years ended
December 31, 2020 and 2019.
EBITDAEBITDA is a non-GAAP
financial measure that does not have a standard meaning and may not
be comparable to a similar measure disclosed by other issuers.
EBITDA referenced herein relates to earnings before interest,
taxes, depreciation and amortization. This measure does not have a
comparable IFRS measure and is used by the Company to manage and
evaluate the cash operating income (loss) of the business. Please
refer to section on EBITDA for reconciliation.
Adjusted EBITDAAdjusted EBITDA
is a non-GAAP financial measure that does not have a standard
meaning and may not be comparable to a similar measure disclosed by
other issuers. Adjusted EBITDA referenced herein relates to
earnings before interest; taxes; depreciation; amortization;
share-based compensation; financing-related costs;
acquisition-related and integration costs, net; litigation costs
and loss provision; change in fair value of contingent
consideration; and loss from discontinued operations. This measure
does not have a comparable IFRS measure and is used by the Company
to evaluate its cash operating income (loss) of the business,
adjusted for factors that are unusual in nature or factors that are
not indicative of the operating performance of the Company. Please
refer to section on Adjusted EBITDA for reconciliation.
Gross ProfitGross Profit is a
non-GAAP financial measure that does not have a standard meaning
and may not be comparable to a similar measure disclosed by other
issuers. Gross Profit referenced herein relates to revenues less
cost sales. This measure does not have a comparable IFRS measure
and is used by the Company to manage and evaluate the operating
performance of the business.
Gross MarginGross Margin is a
non-GAAP financial measure that does not have a standard meaning
and may not be comparable to a similar measure disclosed by other
issuers. Gross Margin referenced herein is defined as gross profit
as a percent of total revenue. This measure does not have a
comparable IFRS measure and is used by the Company to manage and
evaluate the operating performance of the business.
About CloudMD Software &
Services
CloudMD is digitizing the delivery of healthcare
by providing a patient-centric approach, with an emphasis on
continuity of care. By leveraging healthcare technology, the
Company is building one, connected platform that addresses all
points of a patient’s healthcare journey and provides better access
to care and improved outcomes. Through CloudMD’s proprietary
technology, the Company delivers quality healthcare through a
holistic offering including hybrid primary care clinics, specialist
care, telemedicine, mental health support, educational resources
and artificial intelligence (AI). CloudMD’s Enterprise Health
Solutions Division includes one of the top 4 Employee Assistance
Programs in Canada and offers one comprehensive, digitally
connected platform for corporations, insurers and advisors to
better manage the health and wellness of their employees and
customers.
CloudMD currently services a combined ecosystem
of over 7,000 psychiatrists, approximately 4,500 therapists and
counsellors, approximately 4,000 psychologists, over 22,000 family
physicians, over 34,000 medical specialists, over 1,500 allied
health professionals, over 500 clinics, and over 5 million
individuals across North America. For more information visit:
https://investors.cloudmd.ca.
ON BEHALF OF THE BOARD OF DIRECTORS
“Dr. Essam Hamza, MD"Chief Executive Officer
FOR ADDITIONAL INFORMATION CONTACT:
Julia BeckerVP, Investor
Relations julia@cloudmd.ca(604) 785-0850
Forward Looking Statements
This news release contains forward-looking
statements that are based on CloudMD’s expectations, estimates and
projections regarding its business and the economic environment in
which it operates, including with respect to its business plans.
Although CloudMD believes the expectations expressed in such
forward-looking statements are based on reasonable assumptions,
such statements are not guarantees of future performance and
involve risks and uncertainties that are difficult to control or
predict. Therefore, actual outcomes and results may differ
materially from those expressed in these forward-looking statements
and readers should not place undue reliance on such statements.
These forward-looking statements speak only as of the date on which
they are made, and CloudMD undertakes no obligation to update them
publicly to reflect new information or the occurrence of future
events or circumstances, unless otherwise required to do so by
law.
The TSX Venture Exchange does not accept
responsibility for the adequacy or accuracy of this release.
____________________________
1 Gross margin and Adjusted EBITDA are non-GAAP measures as
described in the Non-GAAP Financial Measures section of this News
Release.
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