Revenue of $36.0
million; Gross Margin of 43%
Continued Shift of Revenue Mix to Higher
Margin Integrated Care Management and Virtual Care Infrastructure
Businesses
Substantial Progress Achieved Toward
Company-wide Transformation
Reiterates 2022 Financial
Outlook
Settled the Forward Share Purchase
Agreement Obligations Subsequent to Quarter End
Public Company & Healthcare Industry
Veteran Samuel J. Meckey to Become Chief Executive Officer in
July
DELRAY
BEACH, Fla., May 12, 2022
/PRNewswire/ -- UpHealth, Inc. ("UpHealth" or the "Company") (NYSE:
UPH), a global digital health company delivering technology
platforms, infrastructure, and services to modernize care delivery
and health management, today announced financial results for the
first quarter ended March 31,
2022.
"Our first quarter results represent a solid foundation for the
remainder of the year and position us to deliver upon our
previously stated annual growth expectations supported by our first
quarter 2022 top-line growth of 6% sequentially and 18% over the
first quarter 2021 on a pro forma basis," said Dr. Ramesh Balakrishnan, Chief Executive Officer of
UpHealth. "The demand for our services in our target markets
remains unprecedented and further supports our 2022 outlook.
Additionally, I am very proud of our leadership team, all of whom
have been fully engaged in helping lead our transformation
initiatives. I am pleased to report the full implementation is on
time and on target."
Dr. Balakrishnan continued, "Today, we remain focused on our
highest growth businesses: Syntranet™, Martti™ and HelloLyf, which
we are enhancing to provide comprehensive care management solutions
to payers and governments and are working to grow Martti™ to become
the leading tele-consult provider. With revenue recognition matters
addressed and vigorous processes now in place to ensure this does
not interfere with our results going forward, we will grow revenue
considerably and, importantly, expect to be cash flow positive
prior to year-end, as we work toward building an industry-leading,
global healthcare public enterprise, delivering upon our unique
value proposition."
In a news release this morning, the company announced that
Samuel J. Meckey will be stepping
into the role of CEO effective in July. Mr. Meckey has nearly
20 years of experience in publicly traded healthcare companies and
has consistently driven growth, revenues, and margins across his
areas of responsibilities.
Mr. Meckey was most recently Executive Vice President and
Head of Healthcare at EXLService Holdings, Inc., a leading data
analytics and digital operations and solutions company. Prior
to EXLService, he spent 14 years at UnitedHealth Group's Optum in a
variety of roles, including President, Optum Global Solutions. A
former United States Naval officer, he holds an MBA from
Harvard University and an undergraduate
degree in economics from the United States
Naval Academy.
First Quarter 2022 Financial Highlights:
- Revenue for the first quarter of 2022 was $36.0 million, compared to $33.9 million in the fourth quarter of 2021, a
sequential increase of 6%. Gross margin expanded to 43%, up from
22% in the fourth quarter of 2021.
- Segment results:
-
- Integrated Care Management generated $2.6 million of revenue (7% of total revenue)
with a gross margin of 63%. Similar to the fourth quarter of 2021,
during the first quarter of 2022, the Company's Integrated Care
Management segment provided services to a customer but did not
recognize revenue associated with those services due to concerns
regarding the customer's creditworthiness. In addition, the Company
is continuing to make significant strides in efforts to collect
accounts receivable from a European customer as previously reported
and a positive resolution of the matter is anticipated.
- Virtual Care Infrastructure generated $15.6 million of revenue (43% of total revenue)
with a gross margin of 47%.
- The Company expects the revenue contribution from Integrated
Care Management and Virtual Care Infrastructure to return to levels
reported in Q2 and Q3 2021 as revenue in Integrated Care Management
ramps up over the course of 2022.
- Services generated $17.7 million
of revenue (49% of total revenue) with a gross margin of 35%.
- Operating loss for the first quarter of $(25.0) to $(33.0)
million.
- Adjusted EBITDA for the first quarter of $(1.3) million.
Please refer to the discussion and tables under "Non-GAAP
Financial Information."
First Quarter Business Highlights:
- SyntraNet™ went live to support the largest health plans and
providers in the California CalAIM initiative, covering over 8
million lives.
- Continued domestic Martti™ expansion with four large and
long-term Martti™ language interpretation contracts with Ascension
Texas, Ascension Indiana, Ascension Michigan and Wellstar.
Increased consultation volumes drove higher revenues and led to an
11% increase in gross margins, resulting in an estimated
$15 million in new contract
value.
- Announced comprehensive integration of technology platforms,
Martti™ and SyntraNet™, expanding the ability of care teams
managing value-based and other population health programs to
include real-time resources.
- Martti™ currently supports 575,423 encounters per month and
over 27,200 video endpoints at over 2,300 healthcare locations in
the U.S.
- The Company recorded its largest volume of telehealth use ever
in the U.S. with over 9.4 million minutes of consultations in Q1,
compared to 7.4 million minutes in Q4 2021.
- HelloLyf CX digital dispensaries in India experienced growth of over 29%, with
patient consultations increasing 1.3x, from 376,514 in Q1 2021 to
486,317 in Q1 2022.
- Behavioral Health division recognized as a TRICARE preferred
provider, contracted with Cigna and Magellan, has relationships
with Zelis and Multiplan and was credentialed by 12 additional
players.
- The Company secured three new behavioral health network
provider contracts with Florida
Blue, New Directions and Bright Health, including detox
services for the U.S. Veterans Administration.
Balance Sheet and Cash Flow
At March 31, 2022, UpHealth
reported $70.7 million of cash, cash
equivalents and restricted cash. On April 9, 2022, the Company repaid its forward
share purchase agreement according to the terms of the
contract.
Fiscal 2022 Financial Outlook
For the full year 2022, the Company continues to expect total
revenue between $205 and $233 million, a 38-56% growth rate, gross margins
of 42% to 43% and adjusted EBITDA of $14 to $19
million. The Company expects to become operating cash
flow positive during the third quarter, providing sufficient
liquidity to execute on current growth plans.
"As we get close to celebrating our first full year as a
publicly traded company, UpHealth's business is on a great
trajectory. We remain on-track with our 2022 projections, and our
ability to reiterate our full-year guidance reflects the strength
and diversification of our business," said Dr. Balakrishnan.
Conference Call
UpHealth management will host a live question-and-answer session
with investors and analysts beginning at 8:30 a.m. Eastern Time today, May 12, 2022. The call can be accessed live over
the telephone by dialing (877) 344-8082, passcode 150118, from the
U.S. or International callers can dial (213) 992-4618, passcode
150118. There will also be a simultaneous, live webcast available
on the Investor Relations section of the Company's web site at
https://investors.uphealthinc.com/events-and-presentations/default.aspx
or directly here. The webcast will be archived for approximately 30
days.
About UpHealth Inc.
UpHealth is a global digital health company that delivers
digital-first technology, infrastructure and services to
dramatically improve how healthcare is delivered and managed. The
UpHealth platform creates digitally enabled "care communities" that
improve access and achieve better patient outcomes at lower cost,
through digital health solutions and interoperability tools that
serve patients wherever they are, in their native language.
UpHealth's clients include global governments, health plans,
healthcare providers and community-based organizations. For more
information, please visit https://uphealthinc.com and follow us at
@UpHealthInc on Twitter and UpHealth Inc on LinkedIn.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of U.S. federal securities laws. Such forward-looking
statements include, but are not limited to, the financial
statements of UpHealth, its product offerings and developments and
reception of its product by customers, the start date of its new
CEO, and its expectations, hopes, beliefs, intentions, plans,
prospects or strategies regarding the future revenue and the
business plans of UpHealth's management team. Any statements
contained herein that are not statements of historical fact may be
deemed to be forward-looking statements. In addition, any
statements that refer to projections, forecasts, or other
characterizations of future events or circumstances, including any
underlying assumptions, are forward-looking statements. The words
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intends," "may," "might," "plan," "possible," "potential,"
"predict," "project," "should," "would" and similar expressions may
identify forward-looking statements, but the absence of these words
does not mean that a statement is not forward-looking. The
forward-looking statements contained in this press release are
based on certain assumptions and analyses made by the management of
UpHealth in light of their respective experience and perception of
historical trends, current conditions, and expected future
developments and their potential effects on UpHealth as well as
other factors they believe are appropriate in the circumstances.
There can be no assurance that future developments affecting
UpHealth will be those anticipated. These forward-looking
statements involve a number of risks, uncertainties (some of which
are beyond the control of the parties), or other assumptions that
may cause actual results or performance to be materially different
from those expressed or implied by these forward-looking
statements, including the mix of services utilized by UpHealth's
customers and such customers' needs for these services, market
acceptance of new service offerings, the ability of UpHealth to
expand what it does for existing customers as well as to add new
customers, the ability of the new CEO to begin work when
anticipated, that UpHealth will have sufficient capital to operate
as anticipated, and the impact that the novel coronavirus and the
illness, COVID-19, that it causes, as well as government responses
to deal with the spread of this illness and the reopening of
economies that have been closed as part of these responses, may
have on UpHealth's operations, the demand for UpHealth's products,
global supply chains and economic activity in general. Should one
or more of these risks or uncertainties materialize or should any
of the assumptions being made prove incorrect, actual results may
vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events, or otherwise, except as may be required
under applicable securities laws.
UPHEALTH, INC.
NON-GAAP FINANCIAL
INFORMATION
Non-GAAP Financial Information
This press release includes financial measures that are not
calculated in accordance with U.S. generally accepted accounting
principles (GAAP). To supplement UpHealth's condensed consolidated
financial statements presented in accordance with GAAP, UpHealth
presents investors with non-GAAP financial measures, including pro
forma revenue, pro forma gross margin and adjusted EBITDA.
- Pro forma revenue consists of GAAP revenue and revenue from
UpHealth's subsidiaries prior to their acquisition.
- Pro forma gross margin consists of GAAP gross margin and gross
margin from UpHealth's subsidiaries prior to their acquisition.
- Adjusted EBITDA consists of net income (loss) attributable to
UpHealth, Inc., excluding depreciation and amortization;
stock-based compensation; lease abandonment expenses;
goodwill/intangible asset impairment; contingent liabilities;
acquisition, integration, and transformation costs; other income
(expense); income tax benefit (expense); income (loss) from equity
method investment; net income (loss) attributable to noncontrolling
interests; and other non-recurring charges to GAAP net income
(loss) attributable to UpHealth, Inc. Other non-recurring charges
to GAAP net income (loss) attributable to UpHealth, Inc. may
include transaction expenses in connection with capital raising
transactions (whether debt, equity or equity-linked) and
acquisitions, whether or not consummated, purchase price
adjustments, the cumulative effect of a change in accounting
principles, or other expenses determined to be non-recurring.
UpHealth believes that the presentation of these non-GAAP
financial measures provides important supplemental information to
management and investors regarding financial and business trends
relating to UpHealth's financial condition and results of
operations. Management believes that the items described above
provide an additional measure of UpHealth's operating results and
facilitates comparisons of UpHealth's core operating performance
against prior periods and business model objectives. This
information is provided to investors in order to facilitate
additional analyses of past, present, and future operating
performance and as a supplemental means to evaluate UpHealth's
ongoing operations. UpHealth believes that these non-GAAP financial
measures are useful to investors in their assessment of UpHealth's
operating performance.
Pro forma revenue, pro forma gross margin and adjusted EBITDA
are not calculated in accordance with GAAP, and should be
considered supplemental to, and not as a substitute for, or
superior to, financial measures calculated in accordance with GAAP.
You should not consider these measures in isolation or as a
substitute for analysis of UpHealth's results as reported under
GAAP. UpHealth compensates for these limitations by prominently
disclosing GAAP financial measures and providing investors with
reconciliations from UpHealth's GAAP operating results to the
non-GAAP financial measures for the relevant periods.
The accompanying tables provide more details on the GAAP
financial measures that are most directly comparable to the
non-GAAP financial measures described above and the related
reconciliations between these financial measures.
UPHEALTH,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES (1)
|
(In
thousands)
|
|
|
Three Months
Ended
March 31, 2022
|
|
GAAP
|
Revenue
|
$
35,972
|
|
|
Gross margin
|
43 %
|
|
|
Loss from
operations
|
$(25,000) -
$(33,000)
|
Depreciation and amortization
|
5,000 -
6,000
|
Stock-based compensation
|
1,400
|
Acquisition, integration and transformation costs, lease
abandonment expenses, goodwill impairment,
and non-recurring
expenses (4)
|
17,300 -
24,300
|
Adjusted
EBITDA
|
$(1,300)
|
|
Three Months Ended
March 31, 2021
|
|
GAAP
|
|
Adjustments
(2)
|
|
Pro Forma
(3)
|
Revenue
|
$
12,816
|
|
$
17,792
|
|
$
30,608
|
|
|
|
|
|
|
Gross margin
|
54 %
|
|
37 %
|
|
44 %
|
|
|
|
|
|
|
Net loss attributable
to UpHealth, Inc.
|
$
(2,949)
|
|
$
(923)
|
|
$
(3,872)
|
Net
loss attributable to noncontrolling interests
|
(78)
|
|
22
|
|
(56)
|
Net loss
|
(3,027)
|
|
(901)
|
|
(3,928)
|
Other expense
|
34
|
|
9
|
|
43
|
Income tax benefit
|
(406)
|
|
(99)
|
|
(505)
|
Loss from equity method investment
|
561
|
|
—
|
|
561
|
Loss from
operations
|
(2,838)
|
|
(991)
|
|
(3,829)
|
Depreciation and amortization
|
922
|
|
1,837
|
|
2,759
|
Acquisition, integration and transformation costs, and
non-recurring expenses (5)
|
2,686
|
|
1,407
|
|
4,093
|
Adjusted
EBITDA
|
$
770
|
|
$
2,253
|
|
$
3,023
|
|
(1) See Non-GAAP
Financial Information section for definitions of our non-GAAP
financial measures.
|
(2) Amounts reflect
operating activity of UpHealth and subsidiaries during the period
prior to each subsidiary's acquisition date, if acquired during the
period.
|
(3) Amounts reflect
operating activity of UpHealth and subsidiaries during the period,
as if acquired at the beginning of the period.
|
(4) Amounts reflect
acquisition, integration and transformation costs, lease
abandonment expenses, and goodwill impairment from the consolidated
statements of operations, as well as other operating expenses
considered to be non-recurring during the period.
|
(5) Amounts reflect
acquisition, integration and transformation costs from the
consolidated statements of operations, as well as other operating
expenses considered to be non-recurring during the
period.
|
UPHEALTH,
INC.
|
SEGMENT INFORMATION
AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1)
|
(In thousands,
unaudited)
|
|
|
|
|
Three Months Ended
March 31, 2022
|
|
|
GAAP
|
Revenue:
|
|
|
Integrated care management (4)
|
|
$
2,612
|
Virtual care infrastructure (5)
|
|
15,630
|
Services (6)
|
|
17,730
|
Total
|
|
$
35,972
|
|
|
|
|
|
Three Months Ended
March 31, 2022
|
|
|
GAAP
|
Gross
Margin:
|
|
|
Integrated care management (4)
|
|
$
1,637
|
Virtual care infrastructure (5)
|
|
7,409
|
Services (6)
|
|
6,258
|
Total
|
|
$
15,304
|
|
|
|
|
|
Three Months Ended
March 31, 2022
|
|
|
GAAP
|
Gross Margin
%:
|
|
|
Integrated care management (4)
|
|
63%
|
Virtual care infrastructure (5)
|
|
47%
|
Services (6)
|
|
35%
|
Total
|
|
43%
|
|
Three Months Ended March 31,
2021
|
|
GAAP
|
|
Adjustments (2)
|
|
Pro Forma (3)
|
Revenue:
|
|
|
|
|
|
Integrated care management (4)
|
$
6,289
|
|
$
—
|
|
$
6,289
|
Virtual care infrastructure (5)
|
590
|
|
10,209
|
|
10,799
|
Services (6)
|
5,937
|
|
7,583
|
|
13,520
|
Total
|
$
12,816
|
|
$
17,792
|
|
$
30,608
|
|
|
|
Three Months Ended March 31,
2021
|
|
GAAP
|
|
Adjustments (2)
|
|
Pro Forma (3)
|
Gross
Margin:
|
|
|
|
|
|
Integrated care management (4)
|
$
5,219
|
|
$
—
|
|
$
5,219
|
Virtual care infrastructure (5)
|
299
|
|
4,194
|
|
4,493
|
Services (6)
|
1,412
|
|
2,407
|
|
3,819
|
Total
|
$
6,930
|
|
$
6,601
|
|
$
13,531
|
|
|
|
|
|
|
|
Three Months Ended March 31,
2021
|
|
GAAP
|
|
Adjustments (2)
|
|
Pro Forma (3)
|
Gross Margin
%:
|
|
|
|
|
|
Integrated care management (4)
|
83 %
|
|
n/a
|
|
83 %
|
Virtual care infrastructure (5)
|
51 %
|
|
41 %
|
|
42 %
|
Services (6)
|
24 %
|
|
32 %
|
|
28 %
|
Total
|
54 %
|
|
37 %
|
|
44 %
|
UPHEALTH,
INC.
|
SEGMENT INFORMATION
AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(1)
|
(In thousands,
unaudited)
|
|
|
(1)
|
See Non-GAAP Financial
Information section for definitions of our non-GAAP financial
measures.
|
|
|
(2)
|
Amounts reflect
operating activity of UpHealth and subsidiaries during the period
prior to each subsidiary's' acquisition date, if acquired during
the period.
|
|
|
(3)
|
Amounts reflect
operating activity of UpHealth and subsidiaries during the period,
as if acquired at the beginning of the period.
|
|
|
|
Segment
Information
|
|
|
|
Our business is
organized into three operating business segments:
|
|
|
|
|
Integrated Care
Management—through our Thrasys subsidiary;
|
|
|
|
|
Virtual Care
Infrastructure—through our Glocal and Cloudbreak subsidiaries; and
|
|
|
|
|
Services—through our
Innovations, BHS and TTC subsidiaries.
|
|
|
|
The reportable segments
are consistent with how management views our services and products
and the financial information reviewed by the chief operating
decision makers. We manage our businesses as components of an
enterprise for which separate information is available and is
evaluated regularly by the chief operating decision makers in
deciding how to allocate resources and assess
performance.
|
|
|
|
|
(4)
|
In the Integrated Care
Management segment, we provide our customers with an advanced,
comprehensive, and extensible technology platform, marketed under
the umbrella "SyntraNetTM" to manage health, quality of care, and
costs, especially for individuals with complex medical, behavioral
health, and social needs.
|
|
|
(5)
|
In the Virtual Care
Infrastructure segment, we provide technology and process-based
healthcare platforms providing our customers comprehensive primary
care, specialty consultations, and translation services, through
telemedicine, Digital Dispensaries, and technology-based hospital
centers.
|
|
|
(6)
|
In the Services
segment, we provide custom compounded medications for the unique
needs of every patient and prescriber. We are a full-service
pharmacy filling prescriptions from our inventory of compounded
medications, as well as drugs purchased from manufacturers.
Additionally, we provide inpatient and outpatient substance abuse
and mental health treatment services for individuals with drug and
alcohol addiction and other behavioral health issues. We offer a
complete continuum of care from detoxification services,
residential care, partial hospitalization programs, and intensive
outpatient and outpatient programs.
|
UPHEALTH,
INC.
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES TO GUIDANCE (1)
|
(in millions,
unaudited)
|
|
|
Full Year 2022 Guidance
|
|
Low
|
|
High
|
Loss from
operations
|
$
(4)
|
|
$
(2)
|
Depreciation and
amortization
|
11
|
|
13
|
Stock-based
compensation
|
7
|
|
8
|
Adjusted
EBITDA
|
$
14
|
|
$
19
|
|
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/uphealth-announces-first-quarter-2022-financial-results-301545819.html
SOURCE UpHealth, Inc.