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 second quarter ended June 30, 2021. All financial
information is presented in Canadian dollars unless otherwise
indicated.
Dr. Essam Hamza, CEO of CloudMD
commented, “I am very pleased with our second quarter financial
results as we delivered another strong quarter that reflects
consistent growth across all divisions of the Company. Q2 2021 was
an impactful quarter for CloudMD as we closed three of the largest
acquisitions to date and added $96 million to our annualized
revenue run rate, which will be fully recognized in Q3 2021. We are
proud of the significant growth we have delivered already, and we
are extremely excited about the future of CloudMD. The integration
of our health technology solutions into one comprehensive
healthcare ecosystem is on track and we have achieved impressive
early adoption rates which will continue to drive organic growth.
We are confident in our vision to disrupt healthcare delivery with
a whole-person, patient-focused approach, which will translate into
meaningful revenue growth in the future.”
Second Quarter 2021 Financial Highlights
- Q2 2021 revenue was $15.7 million,
compared to $8.8 million in Q1 2021 and $2.8 million in Q2 2020.
The increase is primarily attributable to acquisition growth with 4
acquisitions completed in the quarter, and 14 acquisitions
completed in the last twelve months. Excluding the impact of Q2
2021 business acquisitions, the Company achieved a 9% organic
growth rate from its existing businesses over Q1 2021.
- Q2 2021 gross margin1 was 36%,
compared to 41% in Q1 2021 and 37% in Q2 2020. The decrease is due
to revenue mix where patient support programs, a high-volume, and
currently low-margin business, represented approximately 20% of
revenues for the current quarter.
- Net comprehensive loss attributable
to equity holders of the Company in Q2 2021 was $6.2 million or
$0.03 per share, compared to $5.3 million or $0.03 per share in Q1
2021 and $2.8 million or $0.03 per share in Q2 2020.
- Adjusted Earnings Before Interest,
Taxes, Depreciation and Amortization (“Adjusted
EBITDA”) was a loss of $0.7 million in Q2 2021, compared
to a loss of $1.5 million in Q1 2021 and a loss of $1.3 million in
Q2 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
$60.9 million as at June 30, 2021, compared to $99.2 million at
March 31, 2021 and $59.7 million at December 31, 2020. In Q2 2021,
the Company completed 4 acquisitions during the period and secured
a debt facility of up to $62 million.
Second Quarter Corporate Highlights
- 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 Enterprise Health Solutions (“EHS”)
division.
- On May 12, 2021, the Company
announced that it closed the acquisition of Rxi, a proprietary
specialty drug management and patient support platform.
- On June 16, 2021, the Company
appointed Karen Adams as President.
- On June 16, 2021, the Company
announced that Oncidium acquired a strategic tuck-in acquisition
(Cira Health Solutions), adding $17 million to the Company’s
annualized revenue run rate.
- On June 24, 2021, the Company
announced the closing of VisionPros, a rapidly growing digital
eyewear platform.
- On June 28, 2021, the Company
announced the closing of Oncidium, and secured credit facilities of
up to $62 million from Bank of Montreal.
Outlook
CloudMD is focused on creating innovation in the
delivery of healthcare services, by leveraging technology to
improve access to care leading to better health outcomes. Through
its team-based, patient-centric approach, CloudMD provides one,
connected platform for patients, healthcare practitioners, and
enterprise clients to address whole-person, coordinated care. The
Company has a multi-pronged growth strategy which focuses on
organic growth, accretive mergers and acquisitions and leveraging
assets across all divisions.
CloudMD’s primary focus is driving organic
growth by realizing synergies across its healthcare ecosystem. The
Company’s organic growth will be largely driven by: (1)
strengthening and broadening channel partners; (2) realizing
cross-selling opportunities to existing customers across CloudMD;
(3) the deployment and adoption of the Complete Health Platform in
the second half of 2021; (4) new product launches to existing
customers (e.g. iCBT); and (5) US expansion of its North American
offerings.
CloudMD’s proprietary platform has translated to
its Enterprise Health Solutions Division, providing a leading
full-service employer healthcare platform. The Company has already
seen impressive adoption rates across its client base, as well as
cost savings and cross sell synergies. With the closing of
Oncidium, CloudMD’s EHS division is now the largest and fastest
growing division, with over $70 million in annualized revenue and
operating profitably. CloudMD has a robust sales pipeline and
remains focused on driving additional growth by securing multi-year
contracts with clients across North America.
The Company has a strong balance sheet and will
continue to deploy capital towards a robust pipeline of accretive,
synergistic acquisitions, focused on products, capabilities,
clinical specialties, and technologies that are highly scalable and
rapidly growing. CloudMD is actively seeking potential tuck in
acquisition targets that are complementary to its business and
digital healthcare strategy.
CloudMD will continue to focus on delivering
meaningful shareholder value by executing on its growth strategy
through accretive acquisition, strategic capital allocation and
continuing to achieve organic growth across all divisions.
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, except per share amounts) |
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
2021 |
2020 |
(%) |
2021 |
2020 |
(%) |
Revenue |
$ |
15,659 |
|
$ |
2,790 |
|
461 |
% |
$ |
24,434 |
|
$ |
5,847 |
|
318 |
% |
Cost of sales |
|
(10,102 |
) |
|
(1,759 |
) |
474 |
% |
|
(15,286 |
) |
|
(3,692 |
) |
314 |
% |
Gross
profit (1) |
|
5,557 |
|
|
1,031 |
|
439 |
% |
|
9,148 |
|
|
2,155 |
|
325 |
% |
Gross
margin |
|
35.5 |
% |
|
37.0 |
% |
|
|
37.4 |
% |
|
36.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Expenses |
|
11,533 |
|
|
3,432 |
|
236 |
% |
|
20,665 |
|
|
6,197 |
|
233 |
% |
Loss
before other items |
|
(5,976 |
) |
|
(2,401 |
) |
149 |
% |
|
(11,517 |
) |
|
(4,042 |
) |
185 |
% |
Other items, taxes, non-controlling interest |
|
(174 |
) |
|
(367 |
) |
-53 |
% |
|
60 |
|
|
(349 |
) |
-117 |
% |
Net
comprehensive loss attributable to equity holders of the
Company |
|
(6,150 |
) |
|
(2,768 |
) |
122 |
% |
|
(11,457 |
) |
|
(4,391 |
) |
161 |
% |
Loss per share, basic and diluted |
$ |
(0.03 |
) |
$ |
(0.03 |
) |
0 |
% |
$ |
(0.06 |
) |
$ |
(0.05 |
) |
20 |
% |
(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 |
|
Six months ended |
|
June 30, |
|
June 30, |
|
2021 |
2020 |
(%) |
2021 |
2020 |
(%) |
Net comprehensive loss attributable to equity holders of
the Company |
$ |
(6,150 |
) |
$ |
(2,768 |
) |
122 |
% |
$ |
(11,457 |
) |
$ |
(4,391 |
) |
161 |
% |
Add: |
|
|
|
|
|
|
|
|
|
|
Interest
and accretion expense |
|
112 |
|
|
66 |
|
69 |
% |
|
200 |
|
|
127 |
|
57 |
% |
Income
taxes |
|
115 |
|
|
- |
|
100 |
% |
|
155 |
|
|
- |
|
100 |
% |
Depreciation and amortization |
|
829 |
|
|
209 |
|
297 |
% |
|
1,518 |
|
|
411 |
|
269 |
% |
EBITDA(1) for the
period |
|
(5,094 |
) |
|
(2,493 |
) |
104 |
% |
|
(9,584 |
) |
|
(3,853 |
) |
149 |
% |
Share-based compensation |
|
1,438 |
|
|
504 |
|
185 |
% |
|
3,033 |
|
|
949 |
|
220 |
% |
Financing-related costs |
|
122 |
|
|
195 |
|
-37 |
% |
|
871 |
|
|
260 |
|
235 |
% |
Acquisition-related and integration costs, net |
|
2,860 |
|
|
98 |
|
2822 |
% |
|
3,672 |
|
|
118 |
|
3012 |
% |
Litigation costs and loss provision |
|
(57 |
) |
|
403 |
|
-114 |
% |
|
46 |
|
|
403 |
|
-89 |
% |
Change in fair value of contingent consideration |
|
11 |
|
|
- |
|
100 |
% |
|
(326 |
) |
|
- |
|
-100 |
% |
Adjusted EBITDA for the period |
$ |
(720 |
) |
$ |
(1,293 |
) |
-44 |
% |
$ |
(2,288 |
) |
$ |
(2,123 |
) |
8 |
% |
(1) EBITDA is a non-GAAP measure as described in
the Non-GAAP Financial Measures section of this News Release. |
|
Second Quarter 2021 Earnings Conference
Call
CloudMD invites all interested parties to join
the conference call or webinar:
CloudMD Q2 2021 Earnings CallDate: Today, August
25, 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: 6446418
Webcast
Link: https://edge.media-server.com/mmc/p/o2cjg6ix
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 and six months ended June 30, 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, healthcare navigation,
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 Adjusted EBITDA and Gross Margin are non-GAAP measures as
described in the Non-GAAP Financial Measures section of this News
Release.
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