- Q4 Financial Highlights 2019 vs 2018:
- Total revenue was $24.2 million, up 6%
- SaaS revenue was $18.4 million, up 6%
- Total gross margin increased to 63% from 50%
- Full-Year Financial Highlights 2019 vs 2018:
- Total revenue was $96.0 million, up 7%
- SaaS revenue was $72.8 million, up 11%
- Total gross margin increased to 60% from 51%
- Received Landmark FDA 510(k) Clearance for Omics
Core℠
- Completed Sale of Connected Care Business for $47.25
Million, February 2020
NantHealth, Inc. (NASDAQ-GS: NH), a next-generation,
evidence-based, personalized healthcare company, today reported
financial results for its fourth quarter and full year ended
December 31, 2019.
“For both the 2019 fourth quarter and full year, we continued to
generate strong positive sales momentum, largely due to the ongoing
growth of our SaaS business,” said Ron Louks, Chief Operating
Officer, NantHealth. “The results speak to the dedicated efforts of
the entire NantHealth team, who have rallied around our initiatives
to grow our business and drive down expenses.
“In recent months, we have streamlined our operations to
accelerate growth for Eviti and NaviNet SaaS solutions. In June
2019, we completed the divestiture of our home healthcare services
business, and a few weeks ago, we finalized the sale of the assets
related to our Connected Care business for $47.25 million. These
transactions have improved our capital position and financial
flexibility, and allow us to explore growth opportunities.”
Software and Services Q4 Highlights:
- Clinical Decision Support (Eviti®):
- Presented new breast cancer research findings at the San
Antonio Breast Cancer Symposium (SABCS). The study results indicate
that the simultaneous presentation and publication of oncology data
is an effective method for relaying practice-changing clinical
data, enabling oncologists to quickly adjust treatment patterns and
regimen selections
- Deployed significant workflow enhancements to the Eviti
platform including:
- Multiple Payer Access: a significant time-saving enhancement
that simplifies workflow, by allowing a user with multiple payers
to toggle quickly between payer dashboards
- Configuration for Appeals: allows payers to self-configure the
appeals function within their account
- Patient Match and Attach: automatically associates
provider-submitted medical records to the appropriate treatment
plan, eliminating manual processes and helping speed up treatment
plan reviews
- Signed an agreement with Wexford Health Sources, one of the
nation’s largest correctional healthcare companies, as previously
announced. Implementation was completed in early Q1 2020
- In January 2020, announced two expanded Eviti Connect programs:
- A leading U.S. health insurance company extended a successful
two-state pilot program to 13 states after seeing a significant
improvement in the use of evidence-based medicine for member
oncology care
- One of the largest non-profit rural health plans in the country
signed a three-year renewal agreement to continue providing
high-quality, high-value care for members
- Payer Engagement (NaviNet®):
- Achieved 25% increase in NaviNet’s direct to provider Q4 2019
revenues from Q4 2018
- In January 2020, signed an agreement with The Health Plan,
where NaviNet Open will help decrease administrative costs and
improve provider network communication and collaboration for the
plan in West Virginia and Ohio
- Announced enhancements to the NaviNet Open platform:
- Claim Appeal: a new application that allows payers to offer an
electronic channel for appeals submission, enabling stronger
collaboration with the payer for claim resolution, streamlining
what is often a manual analog process for both the provider and
payer
- NaviNet Attachments, now available within our Claim
Investigation workflow, provides our users the ability to submit
their required documentation easily through our portal to our payer
partners, eliminating the need to send supporting documentation
through manual processes outside of the portal and saving valuable
time when reviewing and resolving inquiries
- New Open Authorization enhancements have been introduced that
enable payers and providers to manage complex prior authorization
requests through electronic submissions, reducing manual workflows
based on fax or phone submissions
- Connected Care (VCX, DCX):
- As noted above, the company completed the sale of its Connected
Care assets to Masimo, a global leader in noninvasive monitoring
technologies, on February 3, 2020 for $47.25 million. Assets in the
sale included the Company’s DCX device connectivity software
product (formerly known as DeviceConX™), VCX™ patient vitals
software (formerly known as VitalsConX™), HBox® connectivity hub
and Shuttle interface cable. As part of the transaction, the
NantHealth employees associated with the Connected Care business
joined Masimo
Precision Medicine – Highlights:
- Announced FDA 510(k) clearance for Omics Core℠, the nation’s
first tumor-normal mutation profiling of overall tumor mutational
burden (TMB) from whole exome sequencing in solid tumors. TMB is an
emerging biomarker predicting response to checkpoint therapy and
identifies tumors that may benefit from immunotherapy
- In January 2020, presented GPS Cancer platform data revealing
increased opportunities for HER2 directed therapy in colorectal
cancer patients at the 2020 Gastrointestinal Cancer Symposium
sponsored by the American Society of Clinical Oncology (ASCO). Data
showed that up to 40% more patients may be eligible for HER2
directed therapies, which have implications for drug development
and clinical trials
Artificial Intelligence - Highlights
- In January 2020, NantHealth and NantOmics presented an initial
report on a novel artificial intelligence (AI) platform for aiding
pathologists in image-based lung cancer subtyping at the Society
for Imaging Science and Technology’s International Symposium on
Electronic Imaging 2020. This novel machine vision software
platform accurately subtypes lung cancer pathology and achieves
high concordance with analysis performed by trained medical
pathologists.
- In February 2020, NantHealth and NantOmics announced the
publication of a peer-reviewed study in Breast Cancer Research, a
Springer Nature journal, on a novel AI technique in breast cancer.
The study reports on a novel deep-learning system of digital
pathology images and omics data used together to more precisely
identify mechanisms of therapy resistance.
Business and Financial Highlights
- For the 2019 fourth quarter, total net revenue was $24.2
million, compared with $22.9 million in the 2018 fourth quarter,
with the increase driven primarily by new customers in SaaS
business and the variability in our DCX product line. On June 7,
2019, the Company completed the divestiture of its home healthcare
services business. Accordingly, financial results for the 2019
fourth quarter do not include the results of operations from this
business, which in the recent past averaged approximately $1.5
million of revenue per quarter.
- Gross profit increased to $15.2 million, or 63% of total net
revenue, compared with $11.5 million, or 50% of total net revenue,
for the prior year period. The increase was primarily driven by
continued growth of the Company’s higher margin SaaS business and
overall cost management.
- Selling, general and administrative (SG&A) expenses
declined to $13.9 million from $14.6 million in 2018 fourth
quarter, mainly driven by ongoing cost management efforts and
efficiencies in overall processes. Research and development
(R&D) expenses decreased to $4.8 million from $5.0
million.
- Net loss from continuing operations, net of tax, was $11.7
million, or $0.11 per share, compared with $49.2 million, or $0.45
per share, for the 2018 fourth quarter.
- On a non-GAAP basis, net loss from continuing operations was
$4.9 million, or $0.04 per share, down from $9.0 million, or $0.08
per share, for the fourth quarter of last year. The improvement
reflects the company’s ongoing efforts to manage costs, growth of
its SaaS business and better overall financial performance.
- For the 2019 full year, total net revenue increased to $96.0
million from $89.5 million for the 2018 full year, due to strong
growth in the SaaS and DCX product lines, partially offset by the
divestiture of the home healthcare services business and declines
in GPS sales.
- Gross profit increased to $57.5 million, or 60% of total net
revenue, from $45.2 million, or 51% of total net revenue, for the
prior year.
- SG&A expense declined to $61.0 million from $70.8 million
in 2018, driven by continued efforts to reduce costs and maximize
existing resources. R&D expense declined to $19.1 million from
$20.9 million in 2018.
- For the full year 2019, Net loss from continuing operations,
net of tax, was $62.6 million, or $0.57 per share, compared with
$190.4 million, or $1.74 per share, for the 2018 full year.
- For the full year 2019, on a non-GAAP basis, net loss from
continuing operations was $27.4 million, or $0.25 per share, down
from $44.5 million, or $0.41 per share, for 2018.
- At December 31, 2019, cash and cash equivalents totaled $5.2
million.
Conference Call Information and Forward-Looking
Statements
Later today, the company will host a conference call at 1:30
p.m. PT (4:30 p.m. ET) to review its results of operations for the
fourth quarter and full year ended December 31, 2019. The
conference call will be available to interested parties by dialing
844-309-3709 from the U.S. or Canada, or 281-962-4864 from
international locations, passcode 9998343. The call will be
broadcast via the Internet at www.nanthealth.com. Listeners are
encouraged to visit the website at least 10 minutes prior to the
start of the scheduled presentation to register, download and
install any necessary audio software. A playback of the call will
be archived and accessible on the same website for at least three
months.
Discussion during the conference call may include
forward-looking statements regarding topics such as the company’s
financial status and performance, regulatory and operational
developments, and other comments the company may make about its
future plans or prospects in response to questions from
participants on the conference call.
Use of Non-GAAP Financial Measures
This news release contains references to Non-GAAP financial
measures, including adjusted net loss and adjusted net loss per
share, which are financial measures that are not prepared in
conformity with United States generally accepted accounting
principles (U.S. GAAP). The Company’s management believes that the
presentation of Non-GAAP financial measures provides useful
supplementary information regarding operational performance,
because it enhances an investor’s overall understanding of the
financial results for the Company’s core business. Additionally, it
provides a basis for the comparison of the financial results for
the Company’s core business between current, past and future
periods. Other companies may define these measures in different
ways. Non-GAAP financial measures should be considered only as a
supplement to, and not as a substitute for or as a superior measure
to, financial measures prepared in accordance with U.S. GAAP.
Non-GAAP per share numbers are calculated based on one class of
common stock and do not incorporate the effects, if any, of using
the two-class method.
About NantHealth, Inc.
NantHealth, a member of the NantWorks ecosystem of companies,
provides leading solutions across the continuum of care for
physicians, payers, patients and biopharmaceutical organizations.
NantHealth enables the use of cutting-edge data and technology
toward the goals of empowering clinical decision support and
improving patient outcomes. NantHealth’s comprehensive product
portfolio combines the latest technology in payer/provider
platforms that exchange information in near-real time (NaviNet and
Eviti), and molecular profiling services that combine comprehensive
DNA & RNA tumor-normal profiling with pharmacogenomics analysis
(GPS Cancer®). For more information, please visit
www.nanthealth.com or follow us on Twitter, Facebook and
LinkedIn.
This news release contains certain statements of a
forward-looking nature relating to future events or future business
performance. Forward-looking statements can be identified by the
words “expects,” “anticipates,” “believes,” “intends,” “estimates,”
“plans,” “will,” “outlook” and similar expressions. Forward-looking
statements are based on management’s current plans, estimates,
assumptions and projections, and speak only as of the date they are
made. Risks and uncertainties include, but are not limited to: our
ability to successfully integrate a complex learning system to
address a wide range of healthcare issues; our ability to
successfully amass the requisite data to achieve maximum network
effects; appropriately allocating financial and human resources
across a broad array of product and service offerings; raising
additional capital as necessary to fund our operations; achieving
significant commercial market acceptance for our sequencing and
molecular analysis solutions; establish relationships with, key
thought leaders or payers’ key decision makers in order to
establish GPS Cancer as a standard of care for patients with
cancer; our ability to grow the market for our Systems
Infrastructure, and applications; successfully enhancing our
Systems Infrastructure and applications to achieve market
acceptance and keep pace with technological developments; customer
concentration; competition; security breaches; bandwidth
limitations; our ability to continue our relationship with
NantOmics; our ability to obtain regulatory approvals; dependence
upon senior management; the need to comply with and meet applicable
laws and regulations; unexpected adverse events; clinical adoption
and market acceptance of GPS Cancer; and anticipated cost savings.
We undertake no obligation to update any forward-looking statement
in light of new information or future events, except as otherwise
required by law. Forward-looking statements involve inherent risks
and uncertainties, most of which are difficult to predict and are
generally beyond our control. Actual results or outcomes may differ
materially from those implied by the forward-looking statements as
a result of the impact of a number of factors, many of which are
discussed in more detail in our reports filed with the Securities
and Exchange Commission.
FINANCIAL TABLES FOLLOW
NantHealth, Inc. Consolidated Balance Sheets (Dollars
in thousands, except per share amounts) (Unaudited)
December 31,
2019
2018
Assets Current assets Cash and cash equivalents
$
5,243
$
18,305
Accounts receivable, net
10,918
15,286
Inventories
798
496
Related party receivables, net
823
1,007
Prepaid expenses and other current assets
20,131
4,350
Total current assets
37,913
39,444
Property, plant, and equipment, net
16,095
22,978
Goodwill
115,930
115,930
Intangible assets, net
51,848
64,703
Investment in related party
31,702
40,000
Related party receivable, net of current
1,108
1,611
Operating lease right-of-use assets
10,073
—
Other assets
1,818
1,671
Total assets
$
266,487
$
286,337
Liabilities and Stockholders' Equity Current
liabilities Accounts payable
$
3,951
$
1,650
Accrued and other current liabilities
32,444
13,832
Deferred revenue
16,748
16,263
Related party payables, net
4,120
4,791
Notes payable
238
—
Total current liabilities
57,501
36,536
Deferred revenue, net of current
1,286
6,704
Related party liabilities
24,227
17,708
Related party promissory note
112,666
112,666
Related party convertible note, net
8,864
8,378
Convertible notes, net
84,648
79,433
Operating lease liabilities
11,010
—
Other liabilities
23,421
22,081
Total liabilities
323,623
283,506
Stockholders' equity (deficit) Common stock, $0.0001 par
value per share, 750,000,000 shares authorized; 110,619,678 and
109,491,277 shares issued and outstanding at December 31, 2019 and
2018, respectively
11
11
Additional paid-in capital
889,955
887,289
Accumulated deficit
(946,884
)
(884,122
)
Accumulated other comprehensive loss
(218
)
(347
)
Total stockholders' (deficit) equity
(57,136
)
2,831
Total liabilities and stockholders' equity (deficit)
$
266,487
$
286,337
NantHealth, Inc. Consolidated Statements of
Operations (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2019
2018
2019
2018
Total net revenue
$
24,190
$
22,862
$
95,961
$
89,464
Total cost of revenue
8,944
11,393
38,422
44,269
Gross Profit
15,246
11,469
57,539
45,195
Operating Expenses Selling, general and
administrative
13,942
14,638
61,043
70,763
Research and development
4,840
5,041
19,072
20,916
Amortization of acquisition-related assets
1,054
1,054
4,217
4,217
Impairment of intangible asset — —
3,977
— Total operating expenses
19,836
20,733
88,309
95,896
Loss from operations
(4,590
)
(9,264
)
(30,770
)
(50,701
)
Interest expense, net
(4,601
)
(4,354
)
(18,044
)
(17,120
)
Other expense, net
(586
)
(16,948
)
(5,625
)
(17,876
)
Loss from related party equity method investment
(1,916
)
(18,898
)
(8,317
)
(108,409
)
Loss from continuing operations before income taxes
(11,693
)
(49,464
)
(62,756
)
(194,106
)
Provision for (benefit from) income taxes
56
(244
)
(112
)
(3,673
)
Net loss from continuing operations
(11,749
)
(49,220
)
(62,644
)
(190,433
)
Income (loss) from discontinued operations, net of tax —
97
(118
)
(1,719
)
Net loss
$
(11,749
)
$
(49,123
)
$
(62,762
)
$
(192,152
)
Basic and diluted net loss per share Continuing
operations - common stock
$
(0.11
)
$
(0.45
)
$
(0.57
)
$
(1.74
)
Discontinued operations - common stock
$
—
$
—
$
—
$
(0.02
)
Total net loss per share - common stock
$
(0.11
)
$
(0.45
)
$
(0.57
)
$
(1.76
)
Weighted average shares outstanding Basic - common
stock
110,619,780
109,490,441
110,351,638
109,168,798
Diluted - common stock
110,732,280
109,490,441
110,468,372
109,168,798
NantHealth, Inc. Supplemental Revenue Schedule
(Dollars in thousands) (Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2019
2018
2019
2018
Revenue Software-as-a-service related
$
18,410
$
17,326
$
72,831
$
65,646
Software and hardware related
2,880
744
8,015
4,534
Maintenance
2,748
2,477
10,519
9,834
Total software-related revenue
24,038
20,547
91,365
80,014
Sequencing and molecular analysis
152
622
1,733
3,129
Home health care services —
1,693
2,863
6,321
Total net revenue
$
24,190
$
22,862
$
95,961
$
89,464
Cost of Revenue Software-as-a-service related
$
6,078
$
5,488
$
23,233
$
23,691
Software and hardware related
683
923
2,886
3,335
Maintenance
560
241
1,625
924
Amortization of developed technologies
1,143
1,233
4,662
4,933
Total software-related cost of revenue
8,464
7,885
32,406
32,883
Sequencing and molecular analysis
480
2,612
4,545
8,055
Home health care services —
896
1,471
3,331
Total cost of revenue
$
8,944
$
11,393
$
38,422
$
44,269
NantHealth, Inc. Non-GAAP Net Loss from Continuing
Operations and Non-GAAP Net Loss Per Share from Continuing
Operations (Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
Year Ended
December 31,
2019
2018
2019
2018
Net loss from continuing operations
$
(11,749
)
$
(49,220
)
$
(62,644
)
$
(190,433
)
Adjustments to GAAP net loss from continuing operations:
Loss from related party equity method investment
1,916
18,898
8,317
108,409
Stock-based compensation expense from continuing operations
937
852
2,786
5,657
Acquisition related sales incentive —
425
—
1,420
Change in fair value of derivatives liability — — —
(7
)
Change in fair value of Bookings Commitment
372
16,947
5,036
16,947
Impairment of investment in IOBS — — —
1,750
Non-cash interest expense related to convertible notes
1,495
1,316
5,702
5,019
Intangible amortization from continuing operations
2,197
2,287
8,879
9,150
Impairment of intangible assets — —
3,977
— Loss on sale of business — —
582
— Securities litigation costs
28
(392
)
528
1,317
Tax benefit resulting from certain non-cash tax items
(51
)
(111
)
(570
)
(3,760
)
Total adjustments to GAAP net loss from continuing operations
6,894
40,222
35,237
145,902
Net loss - Non-GAAP from continuing operations
$
(4,855
)
$
(8,998
)
$
(27,407
)
$
(44,531
)
Weighted average basic shares outstanding
110,619,780
109,490,441
110,351,638
109,168,798
Net loss per share from continuing operations -
Non-GAAP
$
(0.04
)
$
(0.08
)
$
(0.25
)
$
(0.41
)
Reconciliation of Net Loss from Continuing
Operations per Common Share to Net Loss per Common Share from
Continuing Operations - Non-GAAP (Unaudited):
Three Months Ended
December 31,
Year Ended
December 31,
2019
2018
2019
2018
Net loss per common share from continuing operations - GAAP
$
(0.11
)
$
(0.45
)
$
(0.57
)
$
(1.74
)
Adjustments to GAAP net loss per common share from continuing
operations: Loss from related party equity method investment
0.03
0.17
0.07
0.98
Stock-based compensation expense from continuing operations
0.01
0.01
0.03
0.05
Acquisition related sales incentive — — —
0.01
Change in fair value of derivatives liability — — — — Change
in fair value of Bookings Commitment —
0.16
0.05
0.16
Impairment of investment in IOBS — — —
0.02
Non-cash interest expense related to convertible notes
0.01
0.01
0.05
0.05
Intangible amortization from continuing operations
0.02
0.02
0.08
0.08
Impairment of intangible assets — —
0.04
— Loss on sale of business — —
0.01
— Securities litigation costs — — —
0.01
Tax benefit resulting from certain non-cash tax items — —
(0.01
)
(0.03
)
Total adjustments to GAAP net loss per common share from continuing
operations
0.07
0.37
0.32
1.33
Net loss per common share from continuing operations -
Non-GAAP
$
(0.04
)
$
(0.08
)
$
(0.25
)
$
(0.41
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200228005517/en/
Investor Contact: Robert Jaffe rjaffe@rjaffeco.com
424.288.4098
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