MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”), an innovative
pharmacy technology company, today reported financial results for
the three months and full-year ended December 31, 2022.
“Since assuming the role of CEO in January 2022,
I have been impressed by the many growth opportunities addressable
by both our pharmacy services and pharmacy technology solutions,”
said Mark Doerr, Chief Executive Officer of MedAvail. “However, I
believe it is in the best interest of our company to balance
topline growth with an alternative path that targets accelerated
profitability. As such, we made the difficult decision earlier this
year to restructure and sell a majority of our SpotRx pharmacy
services assets to CVS. This action will reduce our operating
expense run rate by $35 million to $37 million this year, and our
annual cash usage by approximately 65%.”
“As we progress through 2023, we will be focused
exclusively on our MedCenter pharmacy technology business as a lean
and nimble organization capable of responding quickly to new
opportunities as they emerge, primarily within the primary care and
urgent care channels where we currently have a majority of our
dispensing MedCenters. Longer term, we see opportunities in
additional channels and states where we think automated
prescription dispensing can play an important role in the future
pharmacy landscape.”
“With our recently completed financing, we have
a strengthened balance sheet that we believe will support our
pharmacy technology growth initiatives, intended to allow us to
progress toward profitability without the need for an additional
equity capital raise. I am optimistic for what we can achieve as a
company this year, and I believe we have created a foundation from
which to drive strong, profitable growth over the long-term, to the
benefit of our partners, patients and shareholders.”
Recent Highlights
- Completed a
successful $16 million private placement in March 2023.
- Announced a
strategic restructuring which included the sale of certain assets
of the company’s SpotRx pharmacy services business to CVS.
- Post the
restructuring, the company currently operates 32 net cumulative
dispensing MedCenters in our continuing technology focused
business.
Fourth Quarter and Full-year 2022
Highlights
- Full year
revenue exceeded $43 million, approximately a 95% increase over
2022.
- Achieved a
significant milestone with the successful completion of the Epic
Willow integration and the availability of the MedCenter platform
in the Epic App Orchard Gallery.
- Completed a
successful $50 million private placement by July 2022.
- Completed a
rewrite of the MedDispense software intended to enable greater
flexibility and faster deployment of MedCenters.
Financial OutlookMedAvail
expects stand-alone technology revenue for 2023 to be approximately
$3 million, which would represent greater than 100% growth over
2022 stand-alone technology revenue of $1.4 million (excluding
revenue attributed to SpotRx).
MedAvail further expects full-year 2023 gross
margins to be in excess of 60%.
In addition, the company expects to place an
additional 25 net new dispensing MedCenters, which would result in
57 cumulative net dispensing MedCenters generating revenue by the
end of 2023.
Conference CallMedAvail will
host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Thursday,
April 13, 2023, to discuss its fourth quarter and full-year 2022
financial results. The conference call can be accessed live by
dialing (877) 704-4453 for domestic callers or (201) 389-0920 for
international callers and referring to Conference ID: 13737951. A
webcast of the conference call can be accessed at
https://investors.medavail.com. The webcast will be archived and
available for replay for at least 90 days after the event.
About MedAvailMedAvail
Holdings, Inc. (NASDAQ: MDVL) is a pharmacy technology company,
providing turnkey in-clinic pharmacy services through its
proprietary robotic dispensing platform, the MedAvail MedCenter.
MedAvail helps patients to optimize drug adherence, resulting in
better health outcomes. Learn more at www.medavail.com.
Non-GAAP Financial
MeasuresMedAvail refers to certain financial measures that
are not recognized under U.S. generally accepted accounting
principles ("GAAP") in this press release, including adjusted
EBITDA. See the schedules to this press release for additional
information and reconciliations of such non-GAAP financial
measures.
Forward-Looking Statements
Certain statements included in this press release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the Private Securities Litigation
Reform Act of 1995. Forward-looking statements generally are
accompanied by words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would,"
"plan," "predict," "potential," "seem," "seek," "future,"
"outlook," "project," 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 MedAvail's business
strategy and market opportunity; preliminary estimates of selected
financial results, potential future revenue and cost savings
projections and expectations for growth and profitability;
restructuring and reorganization targets, customer demand and
expansion plans; margin, utilization and cost reduction
improvements; customer partnerships and potential financing
transactions. These statements are based on various assumptions,
whether or not identified in this press release, and on the current
expectations of MedAvail's management and are not predictions of
actual performance. Forward-looking statements are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements, including
but not limited to our ability to successfully achieve the benefits
of a pharmacy technology only business and the efficiencies related
to a restructuring and reorganization, and risks relating to our
ability to successfully consummate potential strategic, financing
and restructuring transactions, as well as other risks discussed
under the heading "Risk Factors" in MedAvail’s recent Annual Report
on Form 10-K and MedAvail’s Quarterly Reports on Form 10-Q, and
other filings MedAvail makes with the Securities and Exchange
Commission (“SEC”) in the future. Any preliminary estimates
regarding selected 2022 financial results are further subject to
the completion of management’s and the audit committee’s final
reviews and MedAvail’s other financial closing procedures and are
therefore subject to change. You should not place undue reliance on
such preliminary information and estimates because they may prove
to be materially inaccurate. While we believe that such preliminary
information and estimates are based on reasonable assumptions,
actual results may vary, and such variations may be material. If
any of these risks materialize or our assumptions prove incorrect,
actual results could differ materially from the results implied by
these forward-looking statements. These forward-looking statements
speak only as of the date hereof and MedAvail specifically
disclaims any obligation to update these forward-looking
statements.
Contacts:Investor
RelationsSteven Halper/Caroline PaulManaging Directors,
LifeSci Advisorsir@medavail.com
SOURCE MedAvail Holdings, Inc.
MEDAVAIL HOLDINGS, INC. |
|
Consolidated Statements of Operations |
|
(in thousands, except share and per share data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenue: |
|
|
|
|
|
|
|
|
Pharmacy and hardware revenue |
$ |
11,258 |
|
|
$ |
6,954 |
|
|
$ |
42,468 |
|
|
$ |
21,119 |
|
|
Service revenue |
|
92 |
|
|
|
326 |
|
|
|
641 |
|
|
|
1,010 |
|
|
Total revenue |
|
11,350 |
|
|
|
7,280 |
|
|
|
43,109 |
|
|
|
22,129 |
|
|
Cost of products sold and services: |
|
|
|
|
|
|
|
|
Pharmacy and hardware cost of products sold |
|
11,432 |
|
|
|
7,562 |
|
|
|
40,259 |
|
|
|
21,306 |
|
|
Service costs |
|
44 |
|
|
|
80 |
|
|
|
265 |
|
|
|
506 |
|
|
Total cost of products sold and services |
|
11,476 |
|
|
|
7,642 |
|
|
|
40,524 |
|
|
|
21,812 |
|
|
Operating expense: |
|
|
|
|
|
|
|
|
Pharmacy operations |
|
3,937 |
|
|
|
4,068 |
|
|
|
15,907 |
|
|
|
13,496 |
|
|
General and administrative |
|
4,770 |
|
|
|
5,544 |
|
|
|
23,499 |
|
|
|
22,277 |
|
|
Selling and marketing |
|
1,748 |
|
|
|
2,148 |
|
|
|
8,486 |
|
|
|
7,204 |
|
|
Research and development |
|
163 |
|
|
|
248 |
|
|
|
1,115 |
|
|
|
849 |
|
|
Total operating expense |
|
10,618 |
|
|
|
12,008 |
|
|
|
49,007 |
|
|
|
43,826 |
|
|
Operating loss |
|
(10,744 |
) |
|
|
(12,370 |
) |
|
|
(46,422 |
) |
|
|
(43,509 |
) |
|
Other gain (loss), net |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
206 |
|
|
Interest income |
|
1 |
|
|
|
5 |
|
|
|
2 |
|
|
|
79 |
|
|
Interest expense |
|
(327 |
) |
|
|
(261 |
) |
|
|
(1,172 |
) |
|
|
(589 |
) |
|
Loss before income taxes |
|
(11,070 |
) |
|
|
(12,626 |
) |
|
|
(47,592 |
) |
|
|
(43,813 |
) |
|
Income tax expense |
|
- |
|
|
|
- |
|
|
|
(24 |
) |
|
|
(2 |
) |
|
Net loss and comprehensive loss |
$ |
(11,070 |
) |
|
$ |
(12,626 |
) |
|
$ |
(47,616 |
) |
|
$ |
(43,815 |
) |
|
Net loss per share - basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.38 |
) |
|
$ |
(0.72 |
) |
|
$ |
(1.34 |
) |
|
Weighted average shares outstanding - basic and diluted |
|
80,105,540 |
|
|
|
32,851,997 |
|
|
|
65,776,384 |
|
|
|
32,656,325 |
|
|
|
|
|
|
|
|
|
|
|
MEDAVAIL HOLDINGS, INC. |
|
Consolidated Balance Sheets |
|
(in thousands, except share and per share amounts) |
|
(Unaudited) |
|
|
|
|
|
|
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
11,444 |
|
|
$ |
19,689 |
|
|
Restricted cash |
|
676 |
|
|
|
400 |
|
|
Accounts receivable (net of allowance for doubtful accounts of $239
thousand for 2022 and $66 thousand for 2021) |
|
2,209 |
|
|
|
1,189 |
|
|
Inventories |
|
6,937 |
|
|
|
3,916 |
|
|
Prepaid expenses and other current assets |
|
2,663 |
|
|
|
2,191 |
|
|
Total current assets |
|
23,929 |
|
|
|
27,385 |
|
|
Property, plant and equipment, net |
|
6,455 |
|
|
|
5,692 |
|
|
Intangible assets, net |
|
465 |
|
|
|
2,300 |
|
|
Right-of-use assets |
|
2,085 |
|
|
|
2,538 |
|
|
Other assets |
|
198 |
|
|
|
228 |
|
|
Total assets |
$ |
33,132 |
|
|
$ |
38,143 |
|
|
Liabilities and Shareholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
1,675 |
|
|
$ |
2,477 |
|
|
Accrued liabilities |
|
1,193 |
|
|
|
1,530 |
|
|
Accrued payroll and benefits |
|
2,213 |
|
|
|
2,733 |
|
|
Deferred revenue |
|
152 |
|
|
|
83 |
|
|
Current portion of lease obligations |
|
708 |
|
|
|
682 |
|
|
Total current liabilities |
|
5,941 |
|
|
|
7,505 |
|
|
Long-term debt, net |
|
4,798 |
|
|
|
9,538 |
|
|
Long-term portion of lease obligations |
|
1,569 |
|
|
|
2,027 |
|
|
Total liabilities |
|
12,308 |
|
|
|
19,070 |
|
|
Commitments and contingencies |
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common shares ($0.001 par value, 300,000,000 and 100,000,000 shares
authorized, 81,169,719 and 32,902,048 shares issued and outstanding
at December 31, 2022 and 2021, respectively) |
|
81 |
|
|
|
33 |
|
|
Warrants |
|
11,148 |
|
|
|
1,373 |
|
|
Additional paid-in-capital |
|
256,229 |
|
|
|
216,685 |
|
|
Accumulated other comprehensive loss |
|
(6,928 |
) |
|
|
(6,928 |
) |
|
Accumulated deficit |
|
(239,706 |
) |
|
|
(192,090 |
) |
|
Total shareholders’ equity |
|
20,824 |
|
|
|
19,073 |
|
|
Total liabilities and shareholders’ equity |
$ |
33,132 |
|
|
$ |
38,143 |
|
|
|
|
|
|
|
MEDAVAIL HOLDINGS, INC. |
|
Supplemental Financial Information - Segments |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Retail PharmacyServices |
|
PharmacyTechnology |
|
Total |
|
Three Months Ended December 31, 2022 |
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
Pharmacy and hardware revenue: |
|
|
|
|
|
|
Retail pharmacy revenue |
$ |
11,095 |
|
|
$ |
— |
|
|
$ |
11,095 |
|
|
Hardware |
— |
|
|
61 |
|
|
61 |
|
|
Subscription |
— |
|
|
102 |
|
|
102 |
|
|
Total pharmacy and hardware revenue |
11,095 |
|
|
163 |
|
|
11,258 |
|
|
Service revenue: |
|
|
|
|
|
|
Software integration |
— |
|
|
— |
|
|
— |
|
|
Software |
— |
|
|
(17 |
) |
|
(17 |
) |
|
Maintenance and support |
— |
|
|
43 |
|
|
43 |
|
|
Installation |
— |
|
|
55 |
|
|
55 |
|
|
Professional services and other |
— |
|
|
11 |
|
|
11 |
|
|
Total service revenue |
— |
|
|
92 |
|
|
92 |
|
|
Total revenue |
11,095 |
|
|
255 |
|
|
11,350 |
|
|
Cost of products sold and services |
11,343 |
|
|
133 |
|
|
11,476 |
|
|
Segment gross profit |
$ |
(248 |
) |
|
$ |
122 |
|
|
$ |
(126 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Retail PharmacyServices |
|
PharmacyTechnology |
|
Total |
|
Three Months Ended December 31, 2021 |
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
Pharmacy and hardware revenue: |
|
|
|
|
|
|
Retail pharmacy revenue |
$ |
6,846 |
|
|
$ |
— |
|
|
$ |
6,846 |
|
|
Hardware |
— |
|
|
— |
|
|
— |
|
|
Subscription |
— |
|
|
108 |
|
|
108 |
|
|
Total pharmacy and hardware revenue |
6,846 |
|
|
108 |
|
|
6,954 |
|
|
Service revenue: |
|
|
|
|
|
|
Software integration |
— |
|
|
— |
|
|
— |
|
|
Software |
— |
|
|
134 |
|
|
134 |
|
|
Maintenance and support |
— |
|
|
47 |
|
|
47 |
|
|
Installation |
— |
|
|
— |
|
|
— |
|
|
Professional services and other |
— |
|
|
145 |
|
|
145 |
|
|
Total service revenue |
— |
|
|
326 |
|
|
326 |
|
|
Total revenue |
6,846 |
|
|
434 |
|
|
7,280 |
|
|
Cost of products sold and services |
6,901 |
|
|
741 |
|
|
7,642 |
|
|
Segment gross profit |
$ |
(55 |
) |
|
$ |
(307 |
) |
|
$ |
(362 |
) |
|
|
|
|
|
|
|
|
|
|
|
MEDAVAIL HOLDINGS, INC. |
|
Supplemental Financial Information - Segments |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Retail PharmacyServices |
|
PharmacyTechnology |
|
Total |
|
Year Ended December 31, 2022 |
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
Pharmacy and hardware revenue: |
|
|
|
|
|
|
Retail pharmacy revenue |
$ |
41,747 |
|
$ |
- |
|
$ |
41,747 |
|
Hardware |
- |
|
297 |
|
297 |
|
Subscription |
- |
|
424 |
|
424 |
|
Total pharmacy and hardware revenue |
41,747 |
|
721 |
|
42,468 |
|
Service revenue: |
|
|
|
|
|
|
Software |
- |
|
210 |
|
210 |
|
Maintenance and support |
- |
|
170 |
|
170 |
|
Installation |
- |
|
132 |
|
132 |
|
Professional services and other |
- |
|
129 |
|
129 |
|
Total service revenue |
- |
|
641 |
|
641 |
|
Total revenue |
41,747 |
|
1,362 |
|
43,109 |
|
Cost of products sold and services |
39,803 |
|
721 |
|
40,524 |
|
Segment gross profit |
$ |
1,944 |
|
$ |
641 |
|
$ |
2,585 |
|
|
|
|
|
|
|
|
|
|
|
|
Retail Pharmacy Services |
|
PharmacyTechnology |
|
Total |
|
Year Ended December 31, 2021 |
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
Pharmacy and hardware revenue: |
|
|
|
|
|
|
Retail pharmacy revenue |
$ |
20,203 |
|
$ |
- |
|
$ |
20,203 |
|
Hardware |
- |
|
470 |
|
470 |
|
Subscription |
- |
|
446 |
|
446 |
|
Total pharmacy and hardware revenue |
20,203 |
|
916 |
|
21,119 |
|
Service revenue: |
|
|
|
|
|
|
Software |
- |
|
259 |
|
259 |
|
Maintenance and support |
- |
|
161 |
|
161 |
|
Installation |
- |
|
39 |
|
39 |
|
Professional services and other |
- |
|
551 |
|
551 |
|
Total service revenue |
- |
|
1,010 |
|
1,010 |
|
Total revenue |
20,203 |
|
1,926 |
|
22,129 |
|
Cost of products sold and services |
20,031 |
|
1,781 |
|
21,812 |
|
Segment gross profit |
$ |
172 |
|
$ |
145 |
|
$ |
317 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
To supplement our consolidated condensed
financial statements, which are prepared and presented in
accordance with GAAP, we use the following non-GAAP financial
measures: EBITDA, and adjusted EBITDA. The presentation of this
financial information is not intended to be considered in isolation
or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP.
We define Adjusted EBITDA for a particular
period as net (loss) income before interest, taxes, depreciation
and amortization, and as further adjusted for non-recurring revenue
from a commercial agreement, inventory adjustment, merger-related
expenses, and stock-based compensation expense.
We use these non-GAAP financial measures for
financial and operational decision-making and as a means to
evaluate period-to-period comparisons. We believe that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain items
that may not be indicative of our recurring core business operating
results, like one-time transaction costs related to the reverse
merger. We believe that both management and investors benefit from
referring to these non-GAAP financial measures in assessing our
performance and when planning, forecasting, and analyzing future
periods. These non-GAAP financial measures also facilitate
management's internal comparisons to our historical performance and
liquidity as well as comparisons to our competitors' operating
results. We believe these non-GAAP financial measures are useful to
investors both because (1) they allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision-making and (2) they are used by our
institutional investors and the analyst community to help them
analyze the health of our business.
There are a number of limitations related to the
use of non-GAAP financial measures. We compensate for these
limitations by providing specific information regarding the GAAP
amounts excluded from these non-GAAP financial measures and
evaluating these non-GAAP financial measures together with their
relevant financial measures in accordance with GAAP.
MEDAVAIL HOLDINGS, INC. |
Unaudited Reconciliation of GAAP to Non-GAAP
Measures |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
Net loss |
$ |
(11,070 |
) |
|
$ |
(12,626 |
) |
|
$ |
(47,616 |
) |
|
$ |
(43,815 |
) |
|
Adjustments to calculate EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
(1 |
) |
|
(5 |
) |
|
(2 |
) |
|
(79 |
) |
|
Interest expense |
327 |
|
|
261 |
|
|
1,172 |
|
|
589 |
|
|
Income tax expense |
— |
|
|
— |
|
|
24 |
|
|
2 |
|
|
Depreciation and amortization (1) |
|
1,465 |
|
|
|
569 |
|
|
|
3,998 |
|
|
|
1,827 |
|
|
EBITDA |
$ |
(9,279 |
) |
|
$ |
(11,801 |
) |
|
$ |
(42,424 |
) |
|
$ |
(41,476 |
) |
|
Adjustments as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
Inventory cost adjustment |
|
- |
|
|
|
626 |
|
|
|
- |
|
|
|
626 |
|
|
Share-based compensation expense |
|
555 |
|
|
|
257 |
|
|
|
2,296 |
|
|
|
1,205 |
|
|
Adjusted EBITDA |
$ |
(8,724 |
) |
|
$ |
(10,918 |
) |
|
$ |
(40,128 |
) |
|
$ |
(39,645 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes $158 thousand and $203 thousand in operating lease
amortization for the three months ended December 31, 2022, and
2021, respectively. Excludes $657 thousand and $750 thousand in
operating lease amortization for the years ended December 31, 2022,
and 2021, respectively. |
|
|
|
|
|
|
|
|
|
|
|
|
|
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