GlobeNewswire Inc | Feb 24, 2021 04:01PM EST

February 24, 2021

ROCHESTER, Mich., Feb. 24, 2021 (GLOBE NEWSWIRE) -- 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 companys 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. -- Companys 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 companys 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 companys 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 companys 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 companys 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 companys 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 todays 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 weve 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 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 twelve months ended December 31, 2020 and 2019.

About OptimizeRxOptimizeRxis a digital health company that provides communications solutions for life science companies, physicians and patients. Connecting over half of healthcare providers in theU.S.and millions of patients through a proprietary network, theOptimizeRxdigital 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 onTwitter,LinkedInor visitwww.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 ContactMaira Alejandra, Media Relations ManagerTel (754) 245-7070malejandra@optimizerx.com

Investor Relations ContactRon Both, CMATel (949) 432-7557Email Contact

OPTIMIZERX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

December31, December31, 2020 2019ASSETS 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 - 5,220,000 current portionTotal 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, 10,000,000shares authorized, none issued and - - outstanding at December 31, 2020 and 2019Common stock, $0.001 par value, 166,666,667shares authorized, 15,223,340 and 14,609,579 15,223 14,601 shares issued and outstanding at December 31,2020 and 2019, respectivelyAdditional 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 For the quarter quarter For the For the ended ended year ended year ended December December December December 31, 31, 31,2020 31, 2020 2019 (Unaudited) 2019 (Unaudited) (Unaudited)Revenue $ 16,426,301 $ 7,379,782 $ 43,313,323 $ 24,598,274 Cost of 7,822,280 2,906,933 19,207,902 9,158,699 revenuesGross margin 8,604,021 4,472,849 24,105,421 15,439,575 Operating expensesStock-based 781,221 490,578 3,172,840 2,260,298 compensationDepreciationand 512,005 536,859 2,075,888 1,282,787 amortizationOther generaland 5,954,327 5,763,874 20,992,012 15,590,054 administrativeexpensesTotaloperating 7,247,553 6,791,311 26,240,740 19,133,139 expensesIncome (loss)from 1,356,468 (2,318,462 ) (2,135,319 ) (3,693,564 )operationsOther income (expense)Interest 698 95,722 68,582 288,028 incomeChange in fairvalue of (660,000 ) (140,390 ) (635,000 )contingentconsiderationTotal otherincome 698 (564,278 ) (71,808 ) (346,972 )(expense)Income (loss)before 1,357,166 (2,882,740 ) (2,207,127 ) (4,040,536 )provision forincome taxesIncome tax - 897,960 - 897,960 benefitNet income $ 1,357,166 $ (1,987,780 ) $ (2,207,127 ) $ (3,142,576 )(loss)Weightedaverage numberof shares 15,127,425 14,548,910 14,827,923 13,387,863 outstanding -basicWeightedaverage numberof shares 16,311,904 14,548,910 14,827,923 13,387,863 outstanding -dilutedNet income(loss) per $ 0.09 $ (0.14 ) $ (0.15 ) $ (0.23 )share ? basicNet income(loss) per $ 0.08 $ (0.14 ) $ (0.15 ) $ (0.23 )share ?diluted

OPTIMIZERx CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

For the For the year ended year ended December31, December31, 2020 2019CASH 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 140,390 635,000 considerationChanges 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 (11,932 ) (1,500,000 )intellectual property rightsCapitalized software development costs (44,752 ) - Cash paid in acquisition, net of cash - (8,994,369 )acquiredNET CASH USED IN INVESTING ACTIVITIES (124,725 ) (10,582,086 )CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock, net - 21,303,826 of offering costsProceeds from exercise of stock options 2,488,394 877,702 Payment of contingent consideration (4,389,187 ) - NET CASH PROVIDED BY (USED IN) FINANCING (1,900,793 ) 22,181,528 ACTIVITIESNET INCREASE (DECREASE IN) CASH AND CASH (8,335,904 ) 9,938,646 EQUIVALENTSCASH AND CASH EQUIVALENTS ? BEGINNING OF 18,852,680 8,914,034 PERIODCASH 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 - 207,559 assetsAcquisition liabilities paid in stock $ 1,6,557,548 $ Shares issued in connection with acquisitions $ $ 5,107,793 Non-cash effect of cumulative adjustments to $ $ 3,229 accumulated deficit

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

FortheThree Months Forthe Year EndedDecember 31, Ended December 31, 2020 2019 2020 2019Net income $1,357,166 $(1,984,780 ) $(2,207,127 ) $(3,142,576 )(loss)Depreciationand 512,005 536,859 2,075,888 1,282,787 amortizationStock-based 781,221 490,578 3,172,840 2,260,298 compensationAcquisition - 799,623 - 799,623 ExpensesIncome orloss relatedto the fair - 660,420 140,390 635,000 value ofcontingentconsiderationDeferred - (897,960 ) - (897,960 )Income TaxesNon-GAAP net $2,650,392 $(395,260 ) $3,181,991 $937,172 income (loss) Non-GAAP netincome (loss) per shareBasic $ $ (0.03 ) $ $ 0.07 0.18 0.21Diluted $ $ (0.03 ) $ $ 0.07 0.16 0.20Weightedaverage sharesoutstanding: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