OptimizeRx Corp. (NASDAQ: OPRX), a leading provider of digital
health messaging for the pharmaceutical industry, reported results
for the first quarter ended March 31, 2019. Quarterly comparisons
are to the same year-ago quarter.
Q1 2019 Financial
Highlights
- Total revenue increased 27% to $5.2 million.
- Gross margin improved from 51.2% to 69.6%.
- Net income of $7,000 vs. a loss of $189,000.
- Non-GAAP net income up 130% to $833,000 or $0.06 per diluted
share (see definition of non-GAAP measures and reconciliation to
GAAP, below).
Q1 2019 Operational
Highlights
- Integrated with healthcare industry’s leading acute electronic
health record (EHR) systems, including Epic and Cerner.
- Partnered with IllumiCare, a pioneer in point-of-care
healthcare information technology that saves hospitals millions
annually. IllumiCare's Smart Ribbon® platform will feature
OptimizeRx’s new RxSavings App that delivers drug savings
opportunities to providers and patients at the point-of-care.
- Formed OptimizeMDs, a multi-specialty physician panel with the
mission of improving the effectiveness of digital health
communications delivered throughout the care continuum.
Q1 2019 Financial Summary
Total revenue in the first quarter of 2019
increased 27% to $5.2 million from $4.1 million in the same
year-ago quarter. The increase was primarily due to increased sales
of messaging products.
Gross margin improved to 69.6% in the first
quarter of 2019 from 51.2% in the year-ago quarter. The improvement
was due to a favorable shift in product mix. The company expects to
maintain gross margins of at least 60% on a quarterly basis in
2019.
Operating expenses totaled $3.5 million, up from
$2.3 million in the same year-ago quarter. The increase was related
to additional expenses from growth initiatives, as well as the
acquisition of CareSpeak Communications which occurred in October
2018.
Net income on a GAAP basis in the first quarter
of 2019 was $7,000 or $0.00 per share, as compared to a net loss of
$189,000 or $(0.02) per share in the year-ago quarter.
Non-GAAP net income for the first quarter of
2019 was up 130% to $833,000 or $0.06 per diluted share, compared
to non-GAAP net income of $362,000 or $0.04 per share in the same
year-ago period (see definition of these non-GAAP measures and
reconciliation to GAAP, below).
The company expects to remain GAAP profitable on
a quarterly basis. Although one-time expenses related to
investments in growth initiatives could result in a loss in any
given quarter.
Cash and cash equivalents totaled $10.1 million
at March 31, 2019, as compared to $8.9 million at December 31,
2018. The increase was primarily due to cash generated from
operations and proceeds from exercise of stock options. The company
has continued to operate debt-free and expects to continue to
generate positive cash flow from operations on a quarterly basis
for the balance of the year.
Management Commentary
“In Q1, we realized our eighth quarter in a row
of revenue growth, along with record gross margin and continued
profitability,” said OptimizeRx CEO, William Febbo. “These record
results were driven by a number of key factors, including better
client access, broader provider reach, solid technology and overall
strong operational performance.
“While we saw strong topline growth in
Q1, our penetration into pharma remains
relatively low. We’re connected
to many manufacturers, but we’ve really
only just begun to penetrate the
market. We see a lot of growth ahead of us and to
manage
this anticipated growth, we recently appointed Stephen
Silvestro to the new position of chief commercialization
officer. He brings a depth of knowledge and a shared
determination to provide affordability and adherence solutions that
link the health care and life sciences industries. We’ve reached a
scale where we can better negotiate enterprise pricing and he
will help in this area.
Miriam Paramore, president at OptimizeRx,
commented: “We also announced in April our latest platform
integration with the health care industry’s leading acute EHR
systems that includes Epic and Cerner. This latest
integration was born out of our continued investment in hospitals
and health systems, including our recent appointment of Denys Ashby
to the new position of vice president of Hospitals & Health
Systems. His appointment demonstrates our commitment to growing
this new major market segment.
“OptimizeRx’s technical integration with
Epic and Cerner enables healthcare providers to provide patient
savings opportunities for nearly all
medications. Research points to improved medication
adherence when patients can identify ways of lowering their
co-payments.”
Febbo added: “With the growth of both our
pharmaceutical products and our distribution network, we expect
that our financial, brand, and clinical
messaging to continue to grow throughout the year, along
with our increasing patient engagement
activities. All of this is expected to drive another year of
record growth, with strong margins and profitability.”
Conference Call
OptimizeRx management will host the
presentation, followed by a question and answer period.
Date: Wednesday, May 8, 2019Time: 4:30 p.m.
Eastern time (1:30 p.m. Pacific time)Toll-free dial-in number:
1-888-224-1005International dial-in number:
1-323-994-2093Conference ID: 3593483
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 May 29, 2019, as
well as available for replay via the Investors section of the
OptimizeRx website at investors.optimizerx.com.
Toll-free replay number:
1-844-512-2921International replay number: 1-412-317-6671Replay ID:
3593483
Definition and Use of Non-GAAP Financial
MeasuresThis earnings release includes a presentation of
non-GAAP net income (loss) and non-GAAP earnings 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
and stock-based compensation expense. 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. We have
provided non-GAAP financial measures to aid investors in better
understanding our 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 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 at the end of this press release
provides a reconciliation of non-GAAP net income (loss) and
non-GAAP EPS for the three month periods ended March 31, 2018 and
2019.
About OptimizeRxOptimizeRx®
(NASDAQ: OPRX), a digital health company, connects pharmaceutical
companies to patients and providers, offering greater
affordability, adherence and brand awareness at the point-of-care.
As the nation’s largest point-of-prescribe promotional platform for
the pharmaceutical industry, OptimizeRx provides a direct
channel for pharma companies to communicate with healthcare
providers right within their workflow and also directly
to patients.
The cloud-based solution supports patient
adherence to medications and better healthcare outcomes with
real-time access to financial assistance, prior authorization,
education and critical clinical
information. OptimizeRx provides more than half of the
ambulatory patient market with access to these benefits through
leading EHR platforms like Allscripts, Amazing Charts and Quest,
and directly via its mobile communications platform.
For more information, follow the company
on Twitter, LinkedIn or
visit www.optimizerx.com.
Important Cautions Regarding Forward
Looking StatementsThis 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
CORPORATIONCONDENSED CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
10,133,940 |
|
|
$ |
8,914,034 |
|
Accounts receivable |
|
4,902,888 |
|
|
|
6,457,841 |
|
Prepaid expenses |
|
446,022 |
|
|
|
360,146 |
|
Total Current Assets |
|
15,482,850 |
|
|
|
15,732,021 |
|
Property and equipment,
net |
|
146,543 |
|
|
|
149,330 |
|
Other Assets |
|
|
|
|
|
|
|
Goodwill |
|
3,678,513 |
|
|
|
3,678,513 |
|
Patent rights, net |
|
2,712,855 |
|
|
|
2,766,944 |
|
Other intangible assets, net |
|
2,397,791 |
|
|
|
2,492,123 |
|
Right of use assets, net |
|
644,335 |
|
|
|
- |
|
Other assets and deposits |
|
193,972 |
|
|
|
235,647 |
|
Total Other Assets |
|
9,627,466 |
|
|
|
9,173,227 |
|
TOTAL ASSETS |
$ |
25,256,859 |
|
|
$ |
25,054,578 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Accounts payable – trade |
$ |
584,820 |
|
|
$ |
411,010 |
|
Accrued expenses |
|
291,456 |
|
|
|
1,300,882 |
|
Revenue share payable |
|
1,132,102 |
|
|
|
1,908,616 |
|
Current portion of lease obligations |
|
110,065 |
|
|
|
- |
|
Current portion of contingent purchase price payable |
|
1,092,000 |
|
|
|
- |
|
Deferred revenue |
|
645,824 |
|
|
|
610,625 |
|
Total Current Liabilities |
|
3,856,267 |
|
|
|
4,231,133 |
|
Non-current Liabilities |
|
|
|
|
|
|
|
Lease obligations, net of current portion |
|
537,716 |
|
|
|
- |
|
Contingent purchase price payable, net of current portion |
1,421,000 |
|
|
|
2,365,000 |
|
Total Non-current liabilities |
1,958,716 |
|
|
|
2,365,000 |
|
Total Liabilities |
5,814,983 |
|
|
|
6,596,133 |
|
Commitments and
contingencies |
- |
|
|
|
- |
|
Stockholders’ Equity |
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no
issued and outstanding at March 31, 2019 or December 31, 2018 |
|
- |
|
|
|
- |
|
Common stock, $0.001 par value, 500,000,000 shares authorized,
12,278,833 and 12,038,618 shares issued and outstanding at March
31, 2019 and December 31, 2018, respectively |
|
12,279 |
|
|
|
12,039 |
|
Additional paid-in-capital |
|
49,705,102 |
|
|
|
48,725,211 |
|
Accumulated deficit |
|
(30,275,505 |
) |
|
|
(30,278,805 |
) |
Total Stockholders’
Equity |
|
19,441,876 |
|
|
|
18,458,445 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
$ |
25,256,859 |
|
|
$ |
25,054,578 |
|
|
|
|
|
|
|
|
|
OPTIMIZERx
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)
|
For the Three Months |
|
Ended March 31, |
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
TOTAL REVENUE |
$ |
5,209,434 |
|
|
$ |
4,112,237 |
|
COST OF REVENUES |
|
1,583,480 |
|
|
|
2,008,092 |
|
|
|
|
|
|
|
|
|
GROSS MARGIN |
|
3,625,954 |
|
|
|
2,104,145 |
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
3,493,789 |
|
|
|
2,295,341 |
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM OPERATIONS |
|
132,165 |
|
|
|
(191,196 |
) |
|
|
|
|
|
|
|
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
Interest Income |
|
22,364 |
|
|
|
2,017 |
|
Change in Fair Value of Contingent Consideration |
|
(148,000 |
) |
|
|
- |
|
Interest (Expense) |
|
- |
|
|
|
- |
|
TOTAL OTHER INCOME (EXPENSE) |
|
(125,636 |
) |
|
|
2,017 |
|
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES |
|
6,529 |
|
|
|
(189,179 |
) |
PROVISION FOR INCOME
TAXES |
|
- |
|
|
|
- |
|
NET INCOME (LOSS) |
$ |
6,529 |
|
|
$ |
(189,179 |
) |
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE SHARES
OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
|
12,077,829 |
|
|
|
9,786,027 |
|
DILUTED |
|
13,077,917 |
|
|
|
9,786,027 |
|
|
|
|
|
|
|
|
|
NET LOSS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC |
$ |
0 |
|
|
$ |
(0.02 |
) |
DILUTED |
$ |
0 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
OPTIMIZERx
CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)
|
|
|
|
For the Three Months Ended March 31, |
|
|
2019 |
|
|
2018 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
Net Income (loss) |
$ |
6,529 |
|
|
$ |
(189,179 |
) |
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
190,301 |
|
|
|
54,473 |
|
Stock-based compensation |
|
530,312 |
|
|
|
468,247 |
|
Stock issued for services |
|
106,034 |
|
|
|
28,875 |
|
Change in fair value of contingent consideration |
|
148,000 |
|
|
|
- |
|
Changes in: |
|
|
|
|
|
|
|
Accounts receivable |
|
1,554,953 |
|
|
|
(414,508 |
) |
Prepaid expenses and other assets |
|
(44,201 |
) |
|
|
64,015 |
|
Accounts payable |
|
173,810 |
|
|
|
(323,419 |
) |
Revenue share payable |
|
(776,514 |
) |
|
|
(279,328 |
) |
Accrued expenses and other liabilities |
|
(1,034,454 |
) |
|
|
(404,291 |
) |
Deferred revenue |
|
35,199 |
|
|
|
207,727 |
|
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES |
|
889,969 |
|
|
|
(787,388 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS USED IN
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
Purchase of equipment |
|
(13,848 |
) |
|
|
(3,803 |
) |
Development costs |
|
|
|
|
|
(32,763 |
) |
NET CASH USED IN INVESTING
ACTIVITIES |
|
(13,848 |
) |
|
|
(36,566 |
) |
|
|
|
|
|
|
|
|
CASH FLOWS PROVIDED BY
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
343,785 |
|
|
|
- |
|
NET CASH PROVIDED BY FINANCING
ACTIVITIES |
|
343,785 |
|
|
|
- |
|
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS |
|
1,219,906 |
|
|
|
(823,954 |
) |
CASH AND CASH EQUIVALENTS -
BEGINNING OF PERIOD |
|
8,914,034 |
|
|
|
5,122,573 |
|
CASH AND CASH EQUIVALENTS -
END OF PERIOD |
$ |
10,133,940 |
|
|
$ |
4,298,619 |
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW
INFORMATION: |
|
|
|
|
|
|
|
Cash paid for interest |
$ |
- |
|
|
$ |
- |
|
Cash paid for income taxes |
$ |
- |
|
|
$ |
- |
|
Non-cash effect of issuance of shares related to net settled
options |
$ |
- |
|
|
$ |
- |
|
Non-cash effect of cumulative adjustments to accumulated
deficit |
$ |
3,229 |
|
|
$ |
142,027 |
|
Lease liabilities arising from right of use assets |
$ |
672,809 |
|
|
$ |
- |
|
Non-cash issuance of shares to WPP, plc |
$ |
- |
|
|
$ |
447,000 |
|
|
|
|
|
|
|
|
|
OPTIMIZERx
CORPORATIONReconciliation of non-GAAP to GAAP
Financial Measures
|
|
|
For the Three Months Ended March 31, |
|
|
2019 |
|
|
2018 |
|
Net income (loss) |
$ |
6,529 |
|
$ |
(189,179 |
) |
Depreciation and
amortization |
|
190,501 |
|
|
54,473 |
|
Stock-based compensation |
|
636,346 |
|
|
497,122 |
|
Non-GAAP net income
(loss) |
$ |
833,376 |
|
$ |
362,416 |
|
|
|
|
|
Non-GAAP net income (loss) per
share |
|
|
|
Basic |
$ |
0.07 |
|
$ |
0.04 |
|
Diluted |
$ |
0.06 |
|
$ |
0.04 |
|
Weighted average shares
outstanding: |
|
|
|
Basic |
|
12,077,829 |
|
|
9,786,027 |
|
Diluted |
|
13,077,917 |
|
|
9,786,027 |
|
|
|
|
|
OptimizeRx ContactDoug Baker,
CFOTel (248) 651-6568 x807dbaker@optimizerx.com
Media Relations ContactNicole
Brooks, Innsena CommunicationsTel (860)
800-2344nicolebrooks@innsena.com
Investor Relations ContactRon
Both, CMATel (949) 432-7557oprx@cma.team
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