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OptimizeRx Corp. (Nasdaq: OPRX), a leading provider of digital health solutions for life science companies, reported results for the three and nine months ended September 30, 2020. Quarterly and nine months comparisons are to the same year-ago period.


GlobeNewswire Inc | Nov 9, 2020 04:01PM EST

November 09, 2020

ROCHESTER, Mich., Nov. 09, 2020 (GLOBE NEWSWIRE) -- OptimizeRx Corp. (Nasdaq: OPRX), a leading provider of digital health solutions for life science companies, reported results for the three and nine months ended September 30, 2020. Quarterly and nine months comparisons are to the same year-ago period.

Financial Highlights

-- Revenue in the third quarter of 2020 increased 110% to a record $10.5 million, with the first nine months of 2020 up 56% to a record $26.9 million. -- Gross profit in the third quarter of 2020 increased 99% to $6.0 million. -- GAAP net loss totaled $0.3 million or $(0.02) per share in the third quarter, with non-GAAP net income at $1.1 million or $0.07 per share (see definition of this non-GAAP measure and reconciliation to GAAP, below). -- Cash and cash equivalents totaled $12.0 million at September 30, 2020. -- Closed additional enterprise deals, bringing total value of enterprise-level engagements to $21 million in annualized revenue.

Q32020Operational Highlights

-- Expanded direct-to-patient reach via partnership with Epion Health, a leader in digital patient engagement solutions, allowing patients at health systems and medical groups across the nation access to the OptimizeRx digital health and communications platform. -- Partnered with Higi, a consumer healthcare technology and engagement company, to provide healthcare consumers with financial assistance and treatment support programs at point-of-dispense. Higi provides OptimizeRx access to more than 10,000 self-service health stations nationwide that allow consumers to measure, track and act on their health data. -- Expanded digital health communication network in collaboration with Change Healthcare to enable providers in the Change Healthcare network to digitally receive important information from the life sciences industry via OptimizeRx. -- Secured two SaaS-based enterprise-level engagements with a combined annual contract value of $3.6 million. -- Enhanced corporate governance with the addition of Greg Wasson, former president and CEO of Walgreens Boots Alliance, to the board of directors. -- Continued webinar series featuring industry thought leaders discussing innovative ideas for improving medication launches.

Q32020Financial Summary

Total revenue in the third quarter of 2020 increased 110% to a record $10.5 million versus $5.0 million in the same year-ago quarter. The quarterly increase was due to increases in sales in the companys messaging products and patient engagement products, including from its acquisition of RMDY Health in 2019.

Gross margin decreased to 57.1% in the third quarter of 2020 as compared to 60.4% in the year-ago quarter. The decrease was related to a change in mix of services provided. The company expects gross margin to improve in the fourth quarter with a target of 60% for the year.

Operating expenses totaled $6.2 million, up from $5.0 million in the same year-ago quarter. The increase was due to the companys efforts to expand its product line and build out its organization for future growth.

Net loss on a GAAP basis in the third quarter of 2020 was $0.3 million or $(0.02) per share, as compared to a net loss of $1.6 million or $(0.11) per share in the third quarter of 2019.

Non-GAAP net income for the third quarter of 2020 was $1.1 million or $0.07 per share, compared to non-GAAP net loss of $0.9 million or $(0.07) per diluted share in the same year-ago period (see definition of these non-GAAP measures and reconciliation to GAAP, below).

While the company expects to return to GAAP profitabilityas its revenue grows, expenses related to investments in growth initiatives or non-cash chargescould result in a GAAP loss in any given quarter. Given the opportunity at hand as discussed below, the company continues to be focused on top-line growth while maintaining a strong balance sheet.

Cash and cash equivalents totaled $12.0 million at September 30, 2020, as compared to $14.1 million at June 30, 2020. The decrease was due to an increased investment in working capital. The company has continued to operate debt-free and expects to be cash-flow positive for the remainder of the year.

Management Commentary

In Q3, we realized triple digit revenue growth, mostly organic, which drove strong non-GAAP net income, stated OptimizeRx CEO, William Febbo. It reflects how our pharma clients are increasingly seeing the point-of-care as essential to their marketing spend.

We also continued to see a growing proportion of enterprise-level recurring revenue and growing interest from our customer base for our new solutions, such as patient engagement, hub enrollment and TelaRep. We finalized our integration and go-forward plan for patient engagement, which provides additional scale for driving growth in recurring revenue. It also opens up access to additional budgets within our client base and supports improved gross margins over time.

We expanded our platform reach during the quarter via our Higi and Epion partnerships that connect us digitally to millions of new patients.We see ourselves at just the beginning of a broad expansion into retail or point-of-dispense as another channel to enable affordability and adherence.Both of these partnerships are very timely, as we are all looking for ways to connect digitally at more points in the healthcare workflow and maximize access to care.

Weare seeing more rapid adoption of digital tools for doctors to combat theCOVID disruption. Macro trends are in our favoras highlighted bythe rapid adoption of telehealth and other digital tools.A cleartheme forming is the need for the appropriatedigitaltools for doctors to maintain their practiceswith under such drastic disruptions occurring with the pandemic. This allows for our solutions to be highlighted as an effective tool settohelp deliver care to patients.

Looking ahead, we are on track for a strong annual growth rate, non-GAAP income and positive cash flow from operational activities. Our pipeline is better than it has ever been, currently sitting at $140million, nearly double versus this time last year. We continue toanticipatea close rate in the range of 35 percent to 50 percent, with these prospects keeping us on pace for another year of record growth in an expanding addressable market.

Conference Call

OptimizeRx management will host the presentation, followed by a question and answer period.

Date: Monday, November 9, 2020Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)Toll-free dial-in number: 1-800-430-8332International dial-in number: 1-323-347-3277Conference ID: 9818386

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 November 30, 2020, as well as available for replay via the Investors section of the OptimizeRx website at optimizerx.com/investors.

Toll-free replay number: 1-844-512-2921International replay number: 1-412-317-6671Replay ID: 9818386

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, non-cash lease expense, 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 companys non-cash operating expenses, management believes that providing non-GAAP financial measures that excludes non-cash expenses allows for meaningful comparisons between the companys 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 companys own core business operating results over different periods of time.

The companys 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 companys industry, as other companies in the industry may calculate such non-GAAP financial results differently. The companys 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 nine months ended September 30, 2020 and 2019.

About OptimizeRxOptimizeRx Corporation (NASDAQ: OPRX) is a digital health company that facilitates communication at the point-of-care among all stakeholders in healthcare. Primarily focused on life science and payer clients, its suite of digital and mobile SaaS-based solutions enables affordability, patient adherence and care management. OptimizeRxs network reaches more than 60% of U.S. ambulatory providers, delivering therapeutic support on specialty medications and patient financial assistance directly within a providers workflow through leading electronic health platforms. OptimizeRxs fully integrated platform supports the real-time exchange of information, improving provider knowledge and patient engagement, and ultimately leading to healthier outcomes.

For more information, follow the company onTwitter,LinkedInor visitwww.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.

Company Contact Doug Baker, CFOTel (248) 651-6568 x807 dbaker@optimizerx.com

Media Contact Maira Alejandra, Media Relations ManagerTel (754) 245-7070 malejandra@optimizerx.com

Investor Relations Contact Ron Both or Grant StudeCMA Investor RelationsTel (949) 432-7557 oprx@cma.team

OPTIMIZERx CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

September30, December31, 2020 2019 ASSETS Current Assets Cash and cash equivalents $ 12,032,538 $ 18,852,680 Accounts receivable, net 13,332,552 7,418,025 Prepaid expenses 1,867,590 871,043 Total Current Assets 27,232,680 27,141,748 Property and equipment, net 151,809 176,014 Other Assets Goodwill 14,740,031 14,740,031 Technology assets, net 5,464,916 6,238,453 Patent rights, net 2,388,320 2,550,587 Other intangible assets, net 4,677,439 5,151,102 Right of use assets, net 474,906 559,863 Other assets and deposits 16,013 80,727 Total Other Assets 27,761,625 29,320,763 TOTAL ASSETS $ 55,146,114 $ 56,638,525 LIABILITIES AND STOCKHOLDERS? EQUITY Current Liabilities Accounts payable ? trade $ 480,502 $ 492,995 Accrued expenses 1,794,019 1,800,635 Revenue share payable 3,642,088 1,618,438 Current portion of lease obligations 121,583 115.431 Current portion of contingent purchase price 1,610,813 1,500,000 payableDeferred revenue 461,277 580,014 Total Current Liabilities 8,110,282 6,107,513 Non-current Liabilities Lease obligations, net of current portion 356,618 448,753 Contingent purchase price payable, net of - 5,220,000 current portionTotal Non-current Liabilities 356,618 5,668,753 Total Liabilities 8,466,900 11,776,266 Commitments and contingencies - - Stockholders? Equity Preferred stock, $0.001 par value, 10,000,000shares authorized, no issued and outstanding - - at September 30, 2020 or December 31, 2019Common stock, $0.001 par value, 500,000,000shares authorized, 15,072,226 and 14,600,579 15,072 14,601 shares issued and outstanding at September30, 2020 and December 31, 2019, respectivelyAdditional paid-in-capital 83,653,045 78,272,268 Accumulated deficit (36,988,903 ) (33,424,610 )Total Stockholders? Equity 46,679,214 44,862,259 TOTAL LIABILITIES AND STOCKHOLDERS? EQUITY $ 55,146,114 $ 56,638,525

OPTIMIZERx CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)

For the Three Months Ended For the Nine Months Ended September 30, September 30, 2020 2019 2020 2019 NET REVENUE $ 10,519,191 $ 5,002,767 $ 26,887,022 $ 17,218,492 COST OF 4,504,844 1,981,143 11,385,622 6,251,766 REVENUESGROSS MARGIN 6,014,347 3,021,624 15,501,400 10,966,726 OPERATING 6,191,069 5,008,934 18,993,187 12,341,827 EXPENSESLOSS FROM (176,722 ) (1,987,310 ) (3,491,787 ) (1,375,101 )OPERATIONS OTHER INCOME (EXPENSE)Interest 4,218 136,368 67,884 192,305 incomeChange infair value of (110,390 ) 280,000 (140,390 ) 25,000 contingentconsideration TOTAL OTHERINCOME (106,172 ) 416,368 (72,506 ) 217,305 (EXPENSE) LOSS BEFOREPROVISION FOR (282,894 ) (1,570,942 ) (3,564,293 ) (1,157,796 )INCOME TAXES PROVISION FOR - - - - INCOME TAXESNET INCOME $ (282,894 ) $ (1,570,942 ) $ (3,564,293 ) $ (1,157,796 )(LOSS) WEIGHTEDAVERAGE SHARESOUTSTANDINGBASIC 14,900,971 14,146,489 14,726,534 12,996,590 DILUTED 14,900,971 14,146,489 14,726,534 12,996,590 EARNINGS(LOSS) PER SHAREBASIC $ (0.02 ) $ (0.11 ) $ (0.24 ) $ (0.09 )DILUTED $ (0.02 ) $ (0.11 ) $ (0.24 ) $ (0.09 )

OPTIMIZERx CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

For the Nine Months Ended September 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ (3,564,293 ) $ (1,157,796 )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation, amortization, and non-cash lease 1,563,883 745,928 expenseStock-based compensation 2,066,609 1,407,938 Stock issued as board compensation 325,011 361,782 Provision for loss on accounts receivable 80,000 - Change in fair value of contingent 140,390 (25,000 )considerationChanges in: Accounts receivable (5,994,527 ) (700,549 )Prepaid expenses and other assets (931,833 ) (469,623 )Accounts payable (12,493 ) 184,464 Revenue share payable 2,023,650 (240,329 )Accrued expenses and other liabilities 704,599 (772,953 )Deferred revenue (118,737 ) 505,279 NET CASH USED IN OPERATING ACTIVITIES (3,717,781 ) (160,859 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of equipment (45,254 ) (61,457 )Purchase of intangible assets - (1,000,000 )NET CASH USED IN INVESTING ACTIVITIES (45,254 ) (1,061,457 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock, net of 1,332,080 22,369,960 commission costsExpenses related to issuance cost of common - (301,711 )stockPayment of contingent consideration (4,389,187 ) - NET CASH PROVIDED BY (USED IN) FINANCING (3,057,107 ) 22,068,249 ACTIVITIESNET INCREASE (DECREASE) IN CASH AND CASH (6,820,142 ) 20,845,933 EQUIVALENTSCASH AND CASH EQUIVALENTS ? BEGINNING OF PERIOD 18,852,680 8,914,034 CASH AND CASH EQUIVALENTS ? END OF PERIOD $ 12,032,538 $ 29,759,967 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $ - $ - Cash paid for income taxes $ - $ - Intangible asset additions included in accounts $ - $ 500,000 payableAcquisition liabilities paid in common stock $ 1,550,000 $ - Non-cash effect of cumulative adjustments to $ - $ 3,229 accumulated deficitLease liabilities arising from right of use $ - $ 672,809 assets

OPTIMIZERx CORPORATIONReconciliation of non-GAAP to GAAP Financial Measures(Unaudited)

FortheThree Months Forthe Nine Months EndedSeptember 30, Ended September 30, 2020 2019 2020 2019 Net loss $ (282,894 ) $ (1,570,942 ) $ (3,564,293 ) $ (1,157,796 )Depreciation,amortization, 523,420 320,055 1,563,883 745,928 and non-cashlease expenseStock-based 756,437 590,244 2,391,619 1,769,720 compensationIncome orloss relatedto the fair 110,390 (280,000 ) 140,390 (25,000 )value ofcontingentconsiderationNon-GAAP net $ 1,107,353 $ (940,643 ) $ 531,599 $ 1,332,852 income (loss) Non-GAAP netincome (loss) per shareBasic $ 0.07 $ (0.07 ) $ 0.04 $ 0.10 Diluted $ 0.07 $ (0.07 ) $ 0.03 $ 0.10 Weightedaverage sharesoutstanding:Basic 14,900,971 14,146,489 14,726,534 12,996,590 Diluted 15,996,241 14,146,489 15,640,050 13,952,330







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