OptimizeRx Corp. (NASDAQ: OPRX), a leading provider of digital
health messaging for the pharmaceutical industry, reported results
for the fourth quarter and year ended December 31, 2018. Quarterly
comparisons are to the same year-ago quarter.
Q4 2018 and Full Year 2018 Financial
Highlights
- Net revenue increased 64% to a record $6.6 million in Q4, and
up 75% to a record $21.2 million for the full year.
- Operating expense as a percentage of net revenue reduced from
69% to 64% in Q4, and from 67% to 57% for the full year.
- Net loss of $110,000 or $(0.01) per basic share in Q4, and net
income of $226,000 or $0.02 per diluted share in 2018.
- Non-GAAP net income was $842,000 or $0.06 per diluted share in
Q4, and $3.1 million or $0.26 per diluted share for the full year
(see definition of these non-GAAP measures and reconciliation to
GAAP, below).
Q4 2018 Operational Highlights
- Acquired CareSpeak Communications, enabling OptimizeRx to
deliver digital health messaging directly to patients for the first
time, thereby better supporting medication affordability and
adherence, and bridging the communication gap between pharma and
patients.
- Launched pilot of new clinical messaging platform with an
established channel partner.
- Signed new pharmaceutical manufacturers for distributing
digital health messaging through OptimizeRx’s expanding network of
EHR channel partners.
- OptimizeRx President Miriam Paramore co-hosted a plenary
session, “Addressing Medication Adherence to Improve Quality of
Care,” at the 12th Annual Digital Pharma East conference in
Philadelphia.
- Joined MSCI USA Microcap Index.
Q4 2018 Financial Summary Net revenue in the
fourth quarter of 2018 increased 64% to a record $6.6 million
versus $4.0 million in the same year-ago quarter. The increase
resulted from an increased number of pharmaceutical engagements,
additional distribution points in the company’s network, and growth
with new messaging solutions.
Gross margin was 62.2% in the fourth quarter of 2018 down from
63.0% in the year-ago quarter. The company anticipates this to
decline slightly in 2019. The company remains focused on improving
margins and maintains its gross margin target of at least 55% for
2019.
Operating expenses in the fourth quarter of 2018 were $4.2
million, up from $2.8 million in the same year-ago quarter. The
increase is primarily related to the company’s acquisition of
CareSpeak Communications in October 2018 and additional expenses
related to its growth initiatives. However, operating expense as a
percentage of revenue decreased to 64% as compared to 69% in the
same year-ago quarter.
Net loss on a GAAP basis for the fourth quarter of 2018 was
$110,000 or $(0.01) per basic share, as compared to a net loss of
$237,000 or $(0.02) per basic share in the year-ago quarter.
Non-GAAP net income for the fourth quarter of 2018 was $842,000
or $0.06 per diluted share, as compared to non-GAAP net income of
$280,000 or $0.03 per diluted share in the same year-ago
period.
The company expects to be GAAP profitable on a quarterly basis.
Although one-time expenses related to investments and growth
initiatives could result in a loss in any given quarter, such as
the company’s acquisition of CareSpeak in Q4 2018.
Cash and cash equivalents totaled $8.9 million at December 31,
2018, as compared to $5.1 million at December 31, 2017. The
increase in cash was primarily due to the net proceeds of $8.1
million from the equity raise completed in May 2018. The company
has continued to operate debt-free and had positive cash flow from
operations of $696,000 in 2018.
Full Year 2018 Financial Summary Net revenue in
2018 increased 75% to a record $21.2 million versus $12.1 million
in 2017.
Operating expenses increased to $12.0 million in 2018 as
compared to $8.1 million in 2017. The increase was primarily due to
the aforementioned acquisition and growth initiatives. However,
operating expense as a percentage of revenue decreased to 57% as
compared to 67% in 2017.
Net income on a GAAP basis totaled $226,000 or $0.02 per diluted
share in 2018, as compared to a net loss of $2.1 million or $(0.21)
per basic share in 2017.
For the full year, non-GAAP net income totaled $3.1 million or
$0.26 per diluted share, which compares non-GAAP net loss of
$877,000 or $(0.09) per basic share in the year-ago period.
Management Commentary
“In Q4, we realized our seventh quarter in a row of revenue
growth and our first year of profitability,” said OptimizeRx CEO,
William Febbo. “These record results were driven by better client
access, broader provider reach, solid technology and operational
performance. Given how early we are in our company’s evolution, we
anticipate continued investment in our commercial reach, product
extensions, channel partners and best-in-class team.
“As a result of our recent acquisition of CareSpeak
Communications, we now have a highly-cost efficient and capable
tech team to develop additional applications, facilitate
integrations, and support cross platform development. They helped
complete our integration of CareSpeak, and we expect revenues from
direct-to-patient digital health messaging to grow nicely in 2019.
We also expect this service to improve medication affordability and
adherence by closing the communication gap between pharma and
patients.
“Today, our network reaches over half the nation’s healthcare
providers and the ambulatory market, making OptimizeRx the
healthcare industry’s largest point-of-care network. Through our
digital platform, pharma companies can regain critical access to
doctors and their patients and provide the information and savings
they need, and precisely when they need it, at the point of care.
This helps create better health outcomes and a win-win-win for
all.”
OptimizeRx president, Miriam Paramore, commented: “We have been
very focused on our expansion into the hospital market where we see
great potential. We recently joined forces with IllumiCare, a
pioneer in point-of-care healthcare information technology that
saves hospitals millions annually. IllumiCare’s Smart Ribbon
platform will feature a new app from OptimizeRx, the RxSavings App,
designed to present drug savings opportunities—such as co-pay
offers and vouchers—that providers and the clinical care team can
distribute to the patient directly at the point-of-care. The
RxSavings App is set to launch in Q2 2019, making it available to
120 IllumiCare-served hospitals in the U.S.”
Febbo added: “For 2019, we’ll remain focused on generating
revenue from our core messaging solutions and expanding our channel
partner network, which now includes reach into the hospital market.
Following our participation at the recent HIMSS health IT
conference, we are encouraged by the several big players involved
in ambulatory and hospital systems who expressed strong interest in
working with us.
“As we continue to demonstrate high ROI from pharma marketing
spend and deploy new solutions, we expect increasing adoption of
our digital health platform by EHRs, hospital systems, and
ultimately new and existing pharma clients. As a result, we
anticipate healthy revenue growth to continue in 2019, driving
greater profitability.”
Conference Call
OptimizeRx management will host the presentation, followed by a
question and answer period.
Date: Tuesday, February 26, 2019Time: 4:30 p.m. Eastern time
(1:30 p.m. Pacific time)Toll-free dial-in number:
1-888-394-8218International dial-in number:
1-323-794-2588Conference ID: 7188619
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 19, 2019, as well as available
for replay via the Investors section of the OptimizeRx website at
www.optimizerx.com.
Toll-free replay number: 1-844-512-2921International replay
number: 1-412-317-6671Replay ID: 7188619
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 and 12-month periods ended December 31, 2017 and
2018.
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. The cloud-based solution
supports patient adherence to medications 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. The company’s mobile messaging platform,
formerly CareSpeak Communications, also supports direct,
real-time communication to patients for improved medication
adherence, affordability, and healthcare outcomes. For more
information, follow the company
on Twitter, LinkedIn or
visit www.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,’ ‘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
CORPORATIONConsolidated Balance
Sheets |
|
|
December 31,2018 |
|
December 31,2017 |
|
|
ASSETS |
(unaudited) |
|
|
Current Assets |
|
|
|
|
|
Cash and cash
equivalents |
$ |
8,914,034 |
|
|
$ |
5,122,573 |
|
Accounts
receivable |
|
6,457,841 |
|
|
|
3,430,890 |
|
Prepaid
expenses |
|
590,744 |
|
|
|
255,428 |
|
Total Current
Assets |
|
15,962,619 |
|
|
|
8,808,891 |
|
Property and equipment,
net |
|
149,330 |
|
|
|
167,305 |
|
Other Assets |
|
|
|
|
|
Goodwill |
|
3,678,513 |
|
|
|
|
Patent
rights, net |
|
2,766,944 |
|
|
|
638,766 |
|
Other
intangible assets, net |
|
2,492,123 |
|
|
|
143,730 |
|
Security
deposit |
|
5,049 |
|
|
|
5,049 |
|
Total Other Assets |
|
8,942,629 |
|
|
|
787,545 |
|
TOTAL ASSETS |
$ |
25,054,578 |
|
|
$ |
9,763,741 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
Accounts
payable – trade |
$ |
411,010 |
|
|
$ |
457,289 |
|
Accrued
expenses |
|
1,300,882 |
|
|
|
953,947 |
|
Revenue
share payable |
|
1,908,616 |
|
|
|
1,624,806 |
|
Deferred
revenue |
|
610,625 |
|
|
|
507,160 |
|
Total
Current Liabilities |
|
4,231,133 |
|
|
|
3,543,202 |
|
Non-current
Liabilities |
|
|
|
|
|
Contingent
purchase price payable |
|
2,365,000 |
|
|
|
- |
|
Total Liabilities |
|
6,596,133 |
|
|
|
3,543,202 |
|
Stockholders'
Equity |
|
|
|
|
|
Preferred
stock, $0.001 par value, 10,000,000 shares authorized, no issued
and outstanding at December 31, 2018 and 2017, |
|
- |
|
|
|
- |
|
Common
stock, $0.001 par value, 500,000,000 shares authorized, 12,038,618
and 9,772,694 shares issued and outstanding at December 31, 2018
and 2017, respectively |
|
12,039 |
|
|
|
9,773 |
|
Stock
warrants |
|
- |
|
|
|
1,286,424 |
|
Additional paid-in-capital |
|
48,725,211 |
|
|
|
35,287,464 |
|
Accumulated deficit |
|
(30,278,805 |
) |
|
|
(30,363,122 |
) |
Total Stockholders'
Equity |
|
18,458,445 |
|
|
|
6,220,539 |
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY |
$ |
25,054,578 |
|
|
$ |
9,763,741 |
|
|
OPTIMIZERx
CORPORATIONConsolidated Statements of
Operations |
|
|
|
For the year ended December 31, 2018 (Unaudited) |
|
|
|
For the year ended December 31, 2017 |
|
|
|
For the quarter ended December 31, 2018 (Unaudited) |
|
|
|
For the quarter ended, December 31, 2017 (Unaudited) |
|
Revenue |
$ |
21,206,363 |
|
$ |
12,127,422 |
|
$ |
6,579,268 |
|
$ |
4,006,919 |
|
Revenue
share expense |
|
8,999,666 |
|
|
6,174,614 |
|
|
2,485,855 |
|
|
1,483,671 |
|
Gross
margin |
|
12,206,697 |
|
|
5,952,808 |
|
|
4,093,413 |
|
|
2,523,248 |
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
|
Stock-based
compensation |
|
2,520,852 |
|
|
902,389 |
|
|
798,866 |
|
|
405,357 |
|
Depreciation and
amortization |
|
316,502 |
|
|
324,551 |
|
|
153,085 |
|
|
111,653 |
|
Other general
and administrative expenses |
|
9,189,211 |
|
|
6,855,834 |
|
|
3,266,909 |
|
|
2,245,544 |
|
Total
operating expenses |
|
12,026,565 |
|
|
8,082,774 |
|
|
4,218,860 |
|
|
2,762,554 |
|
Income
(loss) from operations |
|
180,132 |
|
|
(2,129,966 |
) |
|
(125,447 |
) |
|
(239,306 |
) |
Other
income |
|
|
|
|
|
|
|
|
|
Interest income |
|
46,212 |
|
|
25,937 |
|
|
15,533 |
|
|
2,246 |
|
Total
other income |
|
46,212 |
|
|
25,937 |
|
|
15,533 |
|
|
2,246 |
|
Income
(loss) before provision for income taxes |
|
226,344 |
|
|
(2,104,029 |
) |
|
(109,914 |
) |
|
(237,060 |
) |
Provision for income
taxes |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
Net
income (loss) |
$ |
226,344 |
|
$ |
(2,104,029 |
) |
$ |
(109,914 |
) |
$ |
(237,060 |
) |
Weighted average number
of shares outstanding - basic |
|
10,832,209 |
|
|
9,819,753 |
|
|
12,013,771 |
|
|
9,761,675 |
|
Weighted average number
of shares outstanding - diluted |
|
11,862,991 |
|
|
9,819,753 |
|
|
12,013,771 |
|
|
9,761,675 |
|
Net income (loss) per
share - basic |
$ |
0.02 |
|
$ |
(0.21 |
) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
Net income (loss) per
share – diluted |
$ |
0.02 |
|
$ |
(0.21 |
) |
$ |
(0.01 |
) |
$ |
(0.02 |
) |
|
OPTIMIZERx
CORPORATIONReconciliation of non-GAAP to GAAP
Financial Measures |
|
|
For the Three Months Ended December
31, |
|
For the Year Ended December 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income (loss) |
$ |
(109,914 |
) |
|
$ |
(237,060 |
) |
|
$ |
226,344 |
|
$ |
(2,104,029 |
) |
Depreciation and
amortization |
|
153,085 |
|
|
|
111,653 |
|
|
|
316,502 |
|
|
324,551 |
|
Stock-based
compensation |
|
798,866 |
|
|
|
405,357 |
|
|
|
2,520,852 |
|
|
902,389 |
|
Non-GAAP net income
(loss) |
$ |
842,037 |
|
|
$ |
279,950 |
|
|
$ |
3,063,698 |
|
$ |
(877,089 |
) |
|
|
|
|
|
|
|
|
Non-GAAP net income
(loss) per share |
|
|
|
|
|
|
|
Basic |
$ |
0.07 |
|
|
$ |
0.03 |
|
|
$ |
0.28 |
|
$ |
(0.09 |
) |
Diluted |
$ |
0.06 |
|
|
$ |
0.03 |
|
|
$ |
0.26 |
|
$ |
(0.09 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
Basic |
|
12,013,771 |
|
|
|
9,761,675 |
|
|
|
10,832,209 |
|
|
9,819,753 |
|
Diluted |
|
13,217,534 |
|
|
|
10,213,851 |
|
|
|
11,862,991 |
|
|
9,819,753 |
|
|
|
|
|
|
|
|
|
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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