The Oncology Institute, Inc. (NASDAQ: TOI) (“TOI” or the
“Company”), one of the largest value-based community oncology
groups in the United States, today reported financial results for
its fourth quarter and year ended December 31, 2022.
Recent Operational
Highlights
- Completed a $110 million strategic
investment from Deerfield Management Company, L.P. through secured
senior convertible notes on August 9, 2022
- Ended the fiscal year 2022 with
$132 million in cash, cash equivalents, and investments
- Increased market count to 15 at
year-end from 10 in the prior year, including new markets in
California, Florida and Texas
- Remediated two of the previously
disclosed material weaknesses surrounding controls over review of
revenue and segregation of duties within the financial close and
reporting process. For the remaining one, Management has developed
and continues to execute a remediation plan to address the
previously disclosed material weakness around treatment of complex
accounting transactions
- Received Agency for Healthcare
Research and Quality's (AHRQ) certification as an accredited
Patient Safety Organization
- Generated over $1.7 million in
savings to patients through the Company's dispensary co-pay assist
program
- Added 3 new gain share contracts in
Florida
- Grew Capitated Membership by over
100 thousand lives
- Completed 6 practice
acquisitions
Fourth Quarter 2022 Financial
Highlights
- Consolidated revenue of $71
million, an increase of 36.6% from $52 million compared to the
prior year quarter
- Gross profit of $16 million, an
increase of 87.6% compared to the prior year quarter
- Net loss of $9.5 million compared
to net loss of $10.2 million for the prior year quarter
- Basic and diluted earnings per
share of $(0.11) and $(0.15), respectively, compared to $(0.13) for
the prior year quarter
- Adjusted EBITDA of $(4.6) million
compared to $(5.6) million for the prior year quarter
- Cash, cash equivalents, and
investments of $132 million as of December 31, 2022
Full Year 2022 Results
Management Commentary
Brad Hively, CEO of TOI, commented, "2022 was
our first full year as a public company. I am pleased with the
progress we made driving our growth strategy, with contributions
from both organic and acquired growth. Despite facing certain
headwinds during the year, including Medi-Cal preventing us from
dispensing Oral prescriptions to a portion of our California
patients, a tight labor market, and delays in acquired revenue, we
surpassed the top end of our revised 2022 guidance for Revenue,
Gross Profit, and Adjusted EBITDA and achieved our revised guidance
for covered lives. We also achieved our original guidance for Gross
Profit, Adjusted EBITDA, and covered lives."
Outlook for Fiscal Year
2023
TOI uses Adjusted EBITDA, a non-GAAP metric, as
an additional tool to assess its operational performance. See
"Financial Information: Non-GAAP Financial Measures" below. In
reliance on the unreasonable efforts exception provided under
Regulation S-K, TOI is not reasonably able to provide a
quantitative reconciliation of Adjusted EBITDA to net (loss)
income, the most directly comparable GAAP financial measure,
without unreasonable efforts due to uncertainties regarding taxes,
share-based compensation, goodwill impairment charges, change in
fair value of liabilities, unrealized (gains) losses on
investments, practice acquisition-related costs, consulting and
legal fees, transaction costs and other non-cash items. The
variability of these items could have an unpredictable, and
potentially significant, impact on TOI’s future GAAP financial
results. TOI expects interest expense in the range of $4 million to
$5 million, other adjustment add backs in the range of $2 million
to $4 million, and depreciation and amortization in the range of $4
million to $6 million. TOI is not adding back new clinic startup or
acquisition costs for this non-GAAP metric.
2023 Guidance |
Revenue |
$290 to $320 million, representing approximately 15% to 27% growth
over 2022 revenue |
Gross Profit |
$60 to $70 million |
Adjusted EBITDA |
$(25) to $(28) million |
Value-based lives(1) |
1.75 million to 2.0 million lives |
(1) Represents lives under capitation
contracts.
TOI's achievement of the anticipated results is
subject to risks and uncertainties, including those disclosed in
its filings with the U.S. Securities and Exchange Commission. The
outlook does not take into account the impact of any unanticipated
developments in the business or changes in the operating
environment, nor does it take into account the impact of TOI's
acquisitions, dispositions or financings during 2023. TOI's outlook
assumes a largely reopened global market, which would be negatively
impacted if closures or other restrictive measures persist or are
reimplemented.
Fourth Quarter 2022 Results
Consolidated revenue for Q4 2022 was $71
million, an increase of 36.6% compared to Q4 2021, and a 9.9%
increase compared to Q3 2022.
Revenue for patient services was $48 million, up
51.4% compared to Q4 2021. Growth in patient services revenue was
driven by an increase in capitated contracts entered into during
2022 and in the latter half of 2021 as well as growth in
fee-for-service ("FFS") revenue due to practice acquisitions and an
overall increase in clinic count. Dispensary revenue increased
12.3% compared to Q4 2021 due to an increase in the number of
filled prescriptions and an increase in the average revenue per
filled prescription. Clinical trials & other revenue increased
by 32.9% compared to Q4 2021 primarily due to an increase in
Proposition 56 revenue and TOI Clinical Research revenue.
Gross profit in Q4 2022 was $16 million, an
increase of 87.6% compared to Q4 2021. The increase was primarily
driven by improved cost management of oral and IV drugs and
enhanced rebate opportunities. Gross profit is calculated by
subtracting direct costs of patient services, dispensary, and
clinical trials and other from consolidated revenues.
Selling, general and administrative ("SG&A")
expenses in Q4 2022 were $30 million or 41.4% of revenue, compared
with $48 million, or 92.2% of revenue, in Q4 2021. During Q4 2022,
share-based compensation expense was $6 million. The remainder of
the increase in SG&A expenses was due to headcount and other
costs associated with operating as a public company and supporting
revenue growth and expansion into new markets.
Net loss for Q4 2022 was $9.5 million, a
decrease of $1 million compared to Q4 2021 primarily due to an
increase in operating revenue and decrease in SG&A expenses,
offset by a decreased change in fair value of derivative
liabilities and the goodwill impairment charge.
Adjusted EBITDA was $(4.6) million, an increase
of $1 million compared to Q4 2021, primarily as a result of a
decrease in share-based compensation and change in fair value of
liabilities, offset by the goodwill impairment charge.
Results for the Year Ended
December 31, 2022
Consolidated revenue for the year ended
December 31, 2022 was $252 million, an increase of 24.4%
compared to the prior year.
Revenue for patient services was $167 million,
an increase of 34.4% year-over-year. Growth in patient services
revenue was primarily driven by an increase in capitated contracts
entered into during the year ended December 31, 2022 and in
the latter half of 2021 as well as growth in revenue from
fee-for-service contracts due to practice acquisitions and an
overall increase in clinic count. Dispensary revenue growth lagged
the growth in revenue from patient services largely due to the
Medi-Cal Rx transition. Despite the Medi-Cal Rx transition,
dispensary revenue increased 9.4% compared to the comparable prior
year period due to an increase in the average revenue per filled
prescription. Clinical trials & other revenue decreased by 0.4%
compared to the prior year period due to a decline in miscellaneous
contract revenue.
Gross profit for the year ended
December 31, 2022 was $52 million, an increase of 27.5%
year-over-year. The increase was driven by improved cost management
of our oral and IV drugs and enhanced rebate opportunities.
SG&A expenses for year ended
December 31, 2022 were $120 million or 47.4% of revenue,
compared with $83 million, or 41.1% of revenue, in the prior year.
During 2022, share-based compensation expense was $28 million and
SG&A related to transaction costs was $3 million. The remainder
of the SG&A growth was due to headcount and other costs
associated with operating as a public company and supporting
revenue growth and expansion into new markets.
Net income for the year ended December 31,
2022 was $1.7 million, an increase of $12.6 million compared to the
prior year, primarily due to the increase in gross profit and the
change in the fair value of the warrant, earnout and conversion
option derivative liabilities, offset by the goodwill impairment
charge and increased operating expenses. Adjusted EBITDA was $(24)
million, a decrease of $18 million compared to the prior year,
primarily as a result of the change in fair value of the warrant,
earnout and conversion option derivative liabilities.
Webcast and Conference Call
TOI will host a conference call on Thursday,
March 9, 2023 at 5:00 p.m. (Eastern Time) to discuss fourth quarter
and full year results and management’s outlook for future financial
and operational performance.
The conference call can be accessed live over
the phone by dialing 1-877-407-0789, or for international callers,
1-201-689-8562. A replay will be available two hours after the call
and can be accessed by dialing 1-844-512-2921, or for international
callers, 1-412-317-6671. The passcode for the live call and the
replay is 13735751. The replay will be available until March 16,
2023.
Interested investors and other parties may also
listen to a simultaneous webcast of the conference call by logging
onto the Investor Relations section of TOI's website at
https://investors.theoncologyinstitute.com.
About The Oncology Institute,
Inc.
Founded in 2007, TOI is advancing oncology by
delivering highly specialized, value-based cancer care in the
community setting. TOI offers cutting-edge, evidence-based cancer
care to a population of approximately 1.7 million patients
including clinical trials, transfusions, and other services
traditionally associated with the most advanced care delivery
organizations. With 100+ employed clinicians and more than 700
teammates in over 60 clinic locations and growing, TOI is changing
oncology for the better. For more information visit
www.theoncologyinstitute.com.
Forward-Looking Statements
This press release includes certain statements
that are not historical facts but are forward-looking statements
for purposes of the safe harbor provisions under the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements generally are accompanied by words such as
“preliminary,” “believe,” “may,” “will,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “should,” “would,” “plan,”
“project,” “predict,” “potential,” “guidance,” “approximately,”
“seem,” “seek,” “future,” “outlook,” and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding projections,
anticipated financial results, estimates and forecasts of revenue
and other financial and performance metrics and projections of
market opportunity and expectations. These statements are based on
various assumptions and on the current expectations of TOI and are
not predictions of actual performance. These forward-looking
statements are provided for illustrative purposes only and are not
intended to serve as, and must not be relied on by anyone as, a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many
actual events and circumstances are beyond the control of TOI.
These forward-looking statements are subject to a number of risks
and uncertainties, including the accuracy of the assumptions
underlying the 2023 outlook discussed herein, the outcome of
judicial and administrative proceedings to which TOI may become a
party or governmental investigations to which TOI may become
subject that could interrupt or limit TOI’s operations, result in
adverse judgments, settlements or fines and create negative
publicity; changes in TOI’s clients’ preferences, prospects and the
competitive conditions prevailing in the healthcare sector; failure
to continue to meet stock exchange listing standards; the impact of
COVID-19 on TOI’s business; those factors discussed in the
documents of TOI filed, or to be filed, with the SEC, including the
Item 1A. "Risk Factors" section of TOI's Annual Report on Form 10-K
for the year ended December 31, 2021 filed with the SEC on March
11, 2022 and any subsequent Quarterly Reports on Form 10-Q or
Current Reports on Form 8-K. If the risks materialize or
assumptions prove incorrect, actual results could differ materially
from the results implied by these forward-looking statements. There
may be additional risks that TOI does not presently know or that
TOI currently believes are immaterial that could also cause actual
results to differ from those contained in the forward-looking
statements. In addition, forward-looking statements reflect TOI’s
plans or forecasts of future events and views as of the date of
this press release. TOI anticipates that subsequent events and
developments will cause TOI’s assessments to change. TOI does not
undertake any obligation to update any of these forward-looking
statements. These forward-looking statements should not be relied
upon as representing TOI’s assessments as of any date subsequent to
the date of this press release. Accordingly, undue reliance should
not be placed upon the forward-looking statements.
Financial Information; Non-GAAP
Financial Measures
Some of the financial information and data
contained in this press release, such as Adjusted EBITDA, have not
been prepared in accordance with United States generally accepted
accounting principles (“GAAP”). TOI believes that the use of
Adjusted EBITDA provides an additional tool to assess operational
performance and trends in, and in comparing our financial measures
with, other similar companies, many of which present similar
non-GAAP financial measures to investors. TOI’s non-GAAP financial
measures may be different from non-GAAP financial measures used by
other companies. The presentation of non-GAAP financial measures is
not intended to be considered in isolation or as a substitute for,
or superior to, financial measures determined in accordance with
GAAP. The principal limitation of Adjusted EBITDA is that it
excludes significant expenses and income that are required by GAAP
to be recorded in TOI's financial statements. Because of the
limitations of non-GAAP financial measures, you should consider the
non-GAAP financial measures presented in this press release in
conjunction with TOI’s financial statements and the related notes
thereto.
TOI defines Adjusted EBITDA as net (loss) income
plus depreciation, amortization, interest, taxes, non-cash items,
share-based compensation, goodwill impairment charges, change in
fair value of liabilities, unrealized gains or losses on
investments and other adjustments to add-back the following:
consulting and legal fees related to acquisitions, one-time
consulting and legal fees related to certain advisory projects,
software implementations and debt or equity financings, severance
expense and temporary labor and recruiting charges to build out our
corporate infrastructure. A reconciliation of Adjusted EBITDA to
net loss, the most comparable GAAP metric, is set forth below.
Adjusted EBITDA
Reconciliation
|
|
Three Months Ended December 31, |
|
Change |
(dollars in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
Net loss |
|
$ |
(9,502 |
) |
|
$ |
(10,156 |
) |
|
$ |
654 |
|
|
(6.4 |
)% |
Depreciation and amortization |
|
|
1,192 |
|
|
|
920 |
|
|
|
272 |
|
|
29.6 |
% |
Interest expense, net |
|
|
2,450 |
|
|
|
60 |
|
|
|
2,390 |
|
|
3,983.3 |
% |
Income tax expense (benefit) |
|
|
123 |
|
|
|
(2,467 |
) |
|
|
2,590 |
|
|
(105.0 |
)% |
Non-cash addbacks(1) |
|
|
604 |
|
|
|
526 |
|
|
|
78 |
|
|
14.8 |
% |
Share-based compensation |
|
|
6,070 |
|
|
|
24,382 |
|
|
|
(18,312 |
) |
|
(75.1 |
)% |
Goodwill impairment charges |
|
|
7,948 |
|
|
|
— |
|
|
|
7,948 |
|
|
N/A |
|
Change in fair value of liabilities |
|
|
(15,482 |
) |
|
|
(28,577 |
) |
|
|
13,095 |
|
|
(45.8 |
)% |
Unrealized (gains) losses on investments |
|
|
(673 |
) |
|
|
— |
|
|
|
(673 |
) |
|
N/A |
|
Practice acquisition-related costs(2) |
|
|
91 |
|
|
|
208 |
|
|
|
(117 |
) |
|
(56.3 |
)% |
Post-combination compensation expense(3) |
|
|
155 |
|
|
|
— |
|
|
|
155 |
|
|
N/A |
|
Consulting and legal fees(4) |
|
|
1,115 |
|
|
|
676 |
|
|
|
439 |
|
|
64.9 |
% |
Other, net(5) |
|
|
1,204 |
|
|
|
1,120 |
|
|
|
84 |
|
|
7.5 |
% |
Transaction costs(6) |
|
|
64 |
|
|
|
7,723 |
|
|
|
(7,659 |
) |
|
(99.2 |
)% |
Adjusted EBITDA |
|
$ |
(4,641 |
) |
|
$ |
(5,585 |
) |
|
$ |
944 |
|
|
(16.9 |
)% |
(1) During the three months ended December
31, 2022, non-cash addbacks were primarily comprised of non-cash
rent of $531 and net bad debt write-offs of $74. During the three
months ended December 31, 2021, non-cash addbacks were primarily
comprised of net bad debt write-offs of $250, gain on loan
forgiveness of $230, and non-cash rent of $46.(2) Practice
acquisition-related costs were comprised of consulting and legal
fees incurred to perform due diligence, execute, and integrate
acquisitions of various oncology practices.(3) Deferred
consideration payments for practice acquisitions that are
contingent upon the seller’s future employment at the
Company.(4) Consulting and legal fees were comprised of a
subset of the Company’s total consulting and legal fees during the
three months ended December 31, 2022 and 2021, and related to
certain advisory projects, software implementations, and legal fees
for debt financing and predecessor litigation
matters.(5) Other, net is comprised of temporary labor of $724
and $335, recruiting expenses to build out corporate infrastructure
of $406 and $652, as well as severance expenses resulting from cost
rationalization programs of $45 and $3, and other miscellaneous
charges of $29 and $0 during the three months ended December 31,
2022 and 2021, respectively.(6) Transaction costs incurred
related to the issuance of the Senior Secured Convertible Note such
as legal, audit, administrative, and registration fees for the
three months ended December 31, 2022, and related to the Business
Combination for the three months ended December 31, 2021.
Adjusted EBITDA
Reconciliation
|
|
Year Ended December 31, |
|
Change |
(dollars in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
$ |
|
% |
Net income (loss) |
|
$ |
1,657 |
|
|
$ |
(10,927 |
) |
|
$ |
12,584 |
|
|
(115.2 |
)% |
Depreciation and amortization |
|
|
4,411 |
|
|
|
3,341 |
|
|
|
1,070 |
|
|
32.0 |
% |
Interest expense, net |
|
|
4,082 |
|
|
|
320 |
|
|
|
3,762 |
|
|
1,175.6 |
% |
Income tax expense (benefit) |
|
|
247 |
|
|
|
(671 |
) |
|
|
918 |
|
|
(136.8 |
)% |
Non-cash addbacks(1) |
|
|
1,208 |
|
|
|
(5,115 |
) |
|
|
6,323 |
|
|
(123.6 |
)% |
Share-based compensation |
|
|
27,683 |
|
|
|
24,535 |
|
|
|
3,148 |
|
|
12.8 |
% |
Goodwill impairment charges |
|
|
7,948 |
|
|
|
— |
|
|
|
7,948 |
|
|
N/A |
|
Change in fair value of liabilities |
|
|
(85,258 |
) |
|
|
(28,577 |
) |
|
|
(56,681 |
) |
|
198.3 |
% |
Unrealized (gains) losses on investments |
|
|
(640 |
) |
|
|
— |
|
|
|
(640 |
) |
|
N/A |
|
Practice acquisition-related costs(2) |
|
|
790 |
|
|
|
476 |
|
|
|
314 |
|
|
66.0 |
% |
Post-combination compensation expense(3) |
|
|
2,243 |
|
|
|
— |
|
|
|
2,243 |
|
|
N/A |
|
Consulting and legal fees(4) |
|
|
3,797 |
|
|
|
1,826 |
|
|
|
1,971 |
|
|
107.9 |
% |
Other, net(5) |
|
|
5,030 |
|
|
|
1,692 |
|
|
|
3,338 |
|
|
197.3 |
% |
Transaction costs(6) |
|
|
3,259 |
|
|
|
7,723 |
|
|
|
(4,464 |
) |
|
(57.8 |
)% |
Adjusted EBITDA |
|
$ |
(23,543 |
) |
|
$ |
(5,377 |
) |
|
$ |
(18,166 |
) |
|
337.8 |
% |
(1) During the year ended December 31,
2022, non-cash addbacks were primarily comprised of non-cash rent
of $711, net bad debt write-offs of $476, and other miscellaneous
charges of $22. During the year ended December 31, 2021, non-cash
addbacks were primarily comprised of a $4,957 gain on loan
forgiveness and $417 of net bad debt recoveries, partially offset
by deferred rent of $109 and other miscellaneous charges of
$150.(2) Practice acquisition-related costs were comprised of
consulting and legal fees incurred to perform due diligence,
execute, and integrate acquisitions of various oncology
practices.(3) Deferred consideration payments for practice
acquisitions that are contingent upon the seller’s future
employment at the Company.(4) Consulting and legal fees were
comprised of a subset of the Company’s total consulting and legal
fees during the years ended December 31, 2022 and 2021, and
related to certain advisory projects, software implementations, and
legal fees for debt financing and predecessor litigation
matters.(5) Other, net is comprised of severance expenses
resulting from cost rationalization programs of $248 and $127, as
well as temporary labor of $1,830 and $1,182, recruiting expenses
to build out corporate infrastructure of $2,835 and $1,275, and
other miscellaneous expense of $117 and $131 during the years ended
December 31, 2022 and 2021, respectively. During the years
ended December 31, 2022 and 2021 such expenses were partially
offset by $0 and $1,023, respectively, of stimulus funds received
under the CARES Act.(6) Transaction costs incurred related to
the issuance of the Senior Secured Convertible Note such as legal,
audit, administrative, and registration fees during the year ended
December 31, 2022, and related to the Business Combination
during the year ended December 31, 2021.
Key Business Metrics
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Clinics(1) |
|
|
76 |
|
|
|
67 |
|
|
|
76 |
|
|
|
67 |
|
Markets |
|
|
15 |
|
|
|
10 |
|
|
|
15 |
|
|
|
10 |
|
Lives under value-based contracts (millions) |
|
|
1.7 |
|
|
|
1.6 |
|
|
|
1.7 |
|
|
|
1.6 |
|
Net income (loss) |
|
$ |
(9,502 |
) |
|
$ |
(10,156 |
) |
|
$ |
1,657 |
|
|
$ |
(10,927 |
) |
Adjusted EBITDA (in thousands) |
|
$ |
(4,641 |
) |
|
$ |
(5,585 |
) |
|
$ |
(23,543 |
) |
|
$ |
(5,377 |
) |
(1) Includes independent oncology practices
to which we provide limited management services, but do not bear
the operating costs.
Consolidated Balance Sheets
(Unaudited)(in thousands except share data)
|
|
December 31, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash (includes restricted cash of $0 and $875 as of
December 31, 2022 and December 31, 2021) |
|
$ |
14,010 |
|
|
$ |
115,174 |
|
Marketable securities |
|
|
59,796 |
|
|
|
— |
|
Accounts receivable |
|
|
39,816 |
|
|
|
20,007 |
|
Other receivables |
|
|
705 |
|
|
|
1,237 |
|
Inventories, net |
|
|
9,261 |
|
|
|
6,438 |
|
Prepaid expenses |
|
|
6,918 |
|
|
|
11,200 |
|
Total current assets |
|
|
130,506 |
|
|
|
154,056 |
|
Non-current investments |
|
|
58,354 |
|
|
|
— |
|
Property and equipment, net |
|
|
8,547 |
|
|
|
4,192 |
|
Operating right of use assets |
|
|
24,494 |
|
|
|
— |
|
Intangible assets, net |
|
|
17,957 |
|
|
|
18,245 |
|
Goodwill |
|
|
23,414 |
|
|
|
26,626 |
|
Other assets |
|
|
477 |
|
|
|
320 |
|
Total
assets |
|
$ |
263,749 |
|
|
$ |
203,439 |
|
Liabilities and stockholders’
equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
9,372 |
|
|
$ |
15,559 |
|
Current portion of operating lease liabilities |
|
|
5,498 |
|
|
|
— |
|
Current portion of long-term debt |
|
|
— |
|
|
|
183 |
|
Income taxes payable |
|
|
387 |
|
|
|
132 |
|
Accrued expenses and other current liabilities |
|
|
14,596 |
|
|
|
13,924 |
|
Total current liabilities |
|
|
29,853 |
|
|
|
29,798 |
|
Operating lease liabilities |
|
|
22,060 |
|
|
|
— |
|
Derivative warrant liabilities |
|
|
350 |
|
|
|
2,193 |
|
Derivative earnout liabilities |
|
|
803 |
|
|
|
60,018 |
|
Conversion option derivative liabilities |
|
|
3,960 |
|
|
|
— |
|
Long-term debt, net of unamortized debt issuance costs |
|
|
80,621 |
|
|
|
— |
|
Other non-current liabilities |
|
|
868 |
|
|
|
6,900 |
|
Deferred income taxes liability |
|
|
554 |
|
|
|
371 |
|
Total
liabilities |
|
|
139,069 |
|
|
|
99,280 |
|
Stockholders’ equity: |
|
|
|
|
Common Stock, $0.0001 par value, authorized 500,000,000 shares;
73,265,621 and 73,249,042 shares issued and outstanding at
December 31, 2022 and December 31, 2021 |
|
|
7 |
|
|
|
7 |
|
Series A Convertible Preferred Stock, $0.0001 par value, authorized
10,000,000 shares; 165,045 shares and 163,510 issued and
outstanding at December 31, 2022 and December 31,
2021 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
186,250 |
|
|
|
167,386 |
|
Accumulated deficit |
|
|
(61,577 |
) |
|
|
(63,234 |
) |
Total stockholders’
equity |
|
|
124,680 |
|
|
|
104,159 |
|
Total liabilities and
stockholders’ equity |
|
$ |
263,749 |
|
|
$ |
203,439 |
|
Consolidated Statements of Operations
(Unaudited)(in thousands except share data)
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenue |
|
|
|
|
|
|
|
|
Patient services |
|
$ |
47,992 |
|
|
$ |
31,699 |
|
|
$ |
166,785 |
|
|
$ |
124,074 |
|
Dispensary |
|
|
21,607 |
|
|
|
19,232 |
|
|
|
79,343 |
|
|
|
72,550 |
|
Clinical trials & other |
|
|
1,825 |
|
|
|
1,373 |
|
|
|
6,355 |
|
|
|
6,379 |
|
Total operating
revenue |
|
|
71,424 |
|
|
|
52,304 |
|
|
|
252,483 |
|
|
|
203,003 |
|
Operating expenses |
|
|
|
|
|
|
|
|
Direct costs – patient services |
|
|
38,382 |
|
|
|
27,350 |
|
|
|
134,761 |
|
|
|
99,401 |
|
Direct costs – dispensary |
|
|
17,295 |
|
|
|
16,463 |
|
|
|
65,111 |
|
|
|
62,102 |
|
Direct costs – clinical trials & other |
|
|
118 |
|
|
|
158 |
|
|
|
518 |
|
|
|
652 |
|
Goodwill impairment charges |
|
|
7,948 |
|
|
|
— |
|
|
|
7,948 |
|
|
|
— |
|
Selling, general and administrative expense |
|
|
29,572 |
|
|
|
48,245 |
|
|
|
119,689 |
|
|
|
83,365 |
|
Depreciation and amortization |
|
|
1,192 |
|
|
|
920 |
|
|
|
4,411 |
|
|
|
3,341 |
|
Total operating
expenses |
|
|
94,507 |
|
|
|
93,136 |
|
|
|
332,438 |
|
|
|
248,861 |
|
Loss from
operations |
|
|
(23,083 |
) |
|
|
(40,832 |
) |
|
|
(79,955 |
) |
|
|
(45,858 |
) |
Other non-operating expense
(income) |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
2,450 |
|
|
|
60 |
|
|
|
4,082 |
|
|
|
320 |
|
Change in fair value of derivative warrant liabilities |
|
|
(1,398 |
) |
|
|
(3,686 |
) |
|
|
(1,843 |
) |
|
|
(3,686 |
) |
Change in fair value of earnout liabilities |
|
|
(5,394 |
) |
|
|
(24,891 |
) |
|
|
(59,215 |
) |
|
|
(24,891 |
) |
Change in fair value of conversion option derivative
liabilities |
|
|
(8,690 |
) |
|
|
— |
|
|
|
(24,200 |
) |
|
|
— |
|
Gain on loan forgiveness |
|
|
— |
|
|
|
229 |
|
|
|
(183 |
) |
|
|
(4,957 |
) |
Other, net |
|
|
(672 |
) |
|
|
80 |
|
|
|
(500 |
) |
|
|
(1,046 |
) |
Total other
non-operating income |
|
|
(13,704 |
) |
|
|
(28,208 |
) |
|
|
(81,859 |
) |
|
|
(34,260 |
) |
Income (loss) before provision
for income taxes |
|
|
(9,379 |
) |
|
|
(12,624 |
) |
|
|
1,904 |
|
|
|
(11,598 |
) |
Income tax (expense) benefit |
|
|
(123 |
) |
|
|
2,468 |
|
|
|
(247 |
) |
|
|
671 |
|
Net income
(loss) |
|
$ |
(9,502 |
) |
|
$ |
(10,156 |
) |
|
$ |
1,657 |
|
|
$ |
(10,927 |
) |
Net income (loss) per
share attributable to common stockholders: |
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders, basic |
|
|
(7,745 |
) |
|
|
(9,011 |
) |
|
|
1,229 |
|
|
|
(10,628 |
) |
Weighted-average number of shares outstanding, basic |
|
|
72,751,847 |
|
|
|
69,949,662 |
|
|
|
72,793,497 |
|
|
|
66,230,606 |
|
Net income (loss) per share attributable to common stockholders,
basic |
|
$ |
(0.11 |
) |
|
$ |
(0.13 |
) |
|
$ |
0.02 |
|
|
$ |
(0.16 |
) |
|
|
|
|
|
|
|
|
|
Net loss attributable to common stockholders, diluted |
|
|
(12,666 |
) |
|
|
(9,011 |
) |
|
|
(15,737 |
) |
|
|
(10,628 |
) |
Weighted-average number of shares outstanding, diluted |
|
|
85,591,814 |
|
|
|
69,949,662 |
|
|
|
80,605,600 |
|
|
|
66,230,606 |
|
Net loss per share attributable to common stockholders,
diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.20 |
) |
|
$ |
(0.16 |
) |
Consolidated Statements of Cash Flows
(Unaudited)(in thousands)
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(9,502 |
) |
|
$ |
(10,156 |
) |
|
$ |
1,657 |
|
|
$ |
(10,927 |
) |
Adjustments to reconcile net income (loss) to cash, cash
equivalents, and restricted cash used in operating activities: |
Depreciation and amortization |
|
|
1,192 |
|
|
|
919 |
|
|
|
4,411 |
|
|
|
3,341 |
|
Amortization of debt issuance costs |
|
|
1,552 |
|
|
|
— |
|
|
|
2,444 |
|
|
|
53 |
|
Goodwill impairment charges |
|
|
7,948 |
|
|
|
— |
|
|
|
7,948 |
|
|
|
— |
|
Share-based compensation |
|
|
6,070 |
|
|
|
24,382 |
|
|
|
27,683 |
|
|
|
24,535 |
|
Decrease in fair value of liability classified warrants |
|
|
(1,398 |
) |
|
|
(3,686 |
) |
|
|
(1,843 |
) |
|
|
(3,686 |
) |
Decrease in fair value of liability classified earnouts |
|
|
(5,394 |
) |
|
|
(24,891 |
) |
|
|
(59,215 |
) |
|
|
(24,891 |
) |
Decrease in fair value of liability classified conversion option
derivatives |
|
|
(8,690 |
) |
|
|
— |
|
|
|
(24,200 |
) |
|
|
— |
|
Unrealized (gain) loss on investments |
|
|
316 |
|
|
|
— |
|
|
|
378 |
|
|
|
— |
|
Accretion of discount on investment securities |
|
|
(991 |
) |
|
|
— |
|
|
|
(1,020 |
) |
|
|
— |
|
Deferred taxes |
|
|
— |
|
|
|
2,296 |
|
|
|
183 |
|
|
|
(1,242 |
) |
Gain on loan forgiveness |
|
|
— |
|
|
|
229 |
|
|
|
(183 |
) |
|
|
(4,957 |
) |
Bad debt expense (recovery) |
|
|
74 |
|
|
|
250 |
|
|
|
476 |
|
|
|
(417 |
) |
Loss on disposal of property and equipment |
|
|
(1 |
) |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
Changes in operating assets and liabilities, net of business
combinations: |
Accounts receivable |
|
|
(5,070 |
) |
|
|
2,000 |
|
|
|
(20,285 |
) |
|
|
(2,195 |
) |
Inventories |
|
|
852 |
|
|
|
(502 |
) |
|
|
(1,732 |
) |
|
|
(1,842 |
) |
Other receivables |
|
|
(146 |
) |
|
|
(473 |
) |
|
|
532 |
|
|
|
(792 |
) |
Prepaid expenses |
|
|
737 |
|
|
|
(9,123 |
) |
|
|
4,282 |
|
|
|
(9,091 |
) |
Other current assets |
|
|
— |
|
|
|
9,094 |
|
|
|
— |
|
|
|
— |
|
Operating lease right-of-use assets |
|
|
1,684 |
|
|
|
— |
|
|
|
5,404 |
|
|
|
— |
|
Other assets |
|
|
(16 |
) |
|
|
(70 |
) |
|
|
(157 |
) |
|
|
(198 |
) |
Accrued expenses and other current liabilities |
|
|
(544 |
) |
|
|
(4,515 |
) |
|
|
2,350 |
|
|
|
(3,084 |
) |
Income taxes payable |
|
|
— |
|
|
|
(6,027 |
) |
|
|
255 |
|
|
|
(1,012 |
) |
Accounts payable |
|
|
(1,783 |
) |
|
|
(3,335 |
) |
|
|
(6,187 |
) |
|
|
2,916 |
|
Current and long-term operating lease liabilities |
|
|
(803 |
) |
|
|
— |
|
|
|
(3,801 |
) |
|
|
— |
|
Other non-current liabilities |
|
|
(84 |
) |
|
|
273 |
|
|
|
(1,157 |
) |
|
|
809 |
|
Net cash, cash
equivalents, and restricted cash used in operating
activities |
|
|
(13,997 |
) |
|
|
(23,335 |
) |
|
|
(61,756 |
) |
|
|
(32,680 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(1,995 |
) |
|
|
(871 |
) |
|
|
(5,529 |
) |
|
|
(2,847 |
) |
Purchases of intangible asset in practice acquisitions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(200 |
) |
Cash paid for practice acquisitions, net |
|
|
(470 |
) |
|
|
(8,280 |
) |
|
|
(8,577 |
) |
|
|
(9,107 |
) |
Purchases of marketable securities/investments |
|
|
(30,106 |
) |
|
|
— |
|
|
|
(117,508 |
) |
|
|
— |
|
Net cash, cash
equivalents, and restricted cash used in investing
activities |
|
|
(32,571 |
) |
|
|
(9,151 |
) |
|
|
(131,614 |
) |
|
|
(12,154 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Proceeds from recapitalization transaction |
|
|
— |
|
|
|
333,946 |
|
|
|
— |
|
|
|
333,946 |
|
Transaction costs |
|
|
— |
|
|
|
(33,145 |
) |
|
|
— |
|
|
|
(33,145 |
) |
Payments as a result of recapitalization transaction |
|
|
— |
|
|
|
(167,510 |
) |
|
|
— |
|
|
|
(167,510 |
) |
Proceeds from issuance of long-term debt |
|
|
— |
|
|
|
— |
|
|
|
110,000 |
|
|
|
— |
|
Transactions costs related to issuance of long-term debt |
|
|
— |
|
|
|
— |
|
|
|
(3,663 |
) |
|
|
— |
|
Payments made for financing of insurance payments |
|
|
(1,270 |
) |
|
|
(409 |
) |
|
|
(5,009 |
) |
|
|
(409 |
) |
Payment of deferred consideration liability for acquisition |
|
|
— |
|
|
|
(50 |
) |
|
|
(509 |
) |
|
|
(50 |
) |
Principal payments on long-term debt |
|
|
— |
|
|
|
(5,125 |
) |
|
|
— |
|
|
|
(7,219 |
) |
Principal payments on financing leases |
|
|
(19 |
) |
|
|
(8 |
) |
|
|
(58 |
) |
|
|
(32 |
) |
Common stock repurchase from related party |
|
|
— |
|
|
|
— |
|
|
|
(9,000 |
) |
|
|
— |
|
Common stock issued for options exercised |
|
|
442 |
|
|
|
— |
|
|
|
858 |
|
|
|
— |
|
Taxes for common stock net settled |
|
|
— |
|
|
|
— |
|
|
|
(413 |
) |
|
|
— |
|
Issuance of Legacy TOI preferred stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
20,000 |
|
Net cash, cash
equivalents, and restricted cash (used in) provided by financing
activities |
|
|
(847 |
) |
|
|
136,128 |
|
|
|
92,206 |
|
|
|
154,010 |
|
Net (decrease) increase in
cash, cash equivalents, and restricted cash |
|
|
(47,415 |
) |
|
|
103,642 |
|
|
|
(101,164 |
) |
|
|
109,176 |
|
Cash, cash equivalents, and
restricted cash at beginning of period |
|
|
61,425 |
|
|
|
11,532 |
|
|
|
115,174 |
|
|
|
5,998 |
|
Cash, cash
equivalents, and restricted cash at end of period |
|
$ |
14,010 |
|
|
$ |
115,174 |
|
|
$ |
14,010 |
|
|
$ |
115,174 |
|
Contacts
Media
The Oncology Institute, Inc.Julie
Korinkejuliekorinke@theoncologyinstitute.com(562) 735-3226 x
88806
ReviveMichael
Petronempetrone@reviveagency.com(615) 760-4542
Investors
Solebury Strategic
Communicationsinvestors@theoncologyinstitute.com
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