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CloudMD Reports First Quarter 2022 Financial Performance, Q1 Revenue Rises to $41.4M, Company Says Its "On Path to Profitability and Growth"
Friday, June 3, 2022Company Profile | Follow Company
CloudMD Reports First Quarter 2022 Financial Performance with Path to Profitability and Strong Roadmap for Growth
Victoria, BC, June 3, 2022--(T-Net)--CloudMD Software & Services Inc. (TSXV: DOC, OTCQB: DOCRF), a healthcare technology company, announced this week its financial results for the first quarter ended March 31, 2022.
All financial information is presented in Canadian dollars unless otherwise indicated.
"In Q1 we delivered strong performance aligned with a company commitment to generating synergies, profitable execution, and continued growth. Innovation remains a key Company focus with the launch of our newly branded integrated personalized connected health platform, Kii. This is a milestone as we transform the way individuals receive healthcare. We are seeing momentum in client acquisition as Employers recognize the positive impact of our connected health ecosystem, starting with our unique nurse-led in-take. We are providing measurable improvements in employees' health and wellness and reductions in absenteeism, driving significant return on investment." said Karen Adams, Interim CEO and President of CloudMD.
"As you've heard from us repeatedly, we remain focused on cost control, realizing synergies, and profitable execution. We have a strategic plan that focuses on leveraging our core assets, maximizing returns for our clients and shareholders, and achieving sustained profitability."
First Quarter 2022 Financial Highlights
First Quarter and Subsequent Corporate Highlights
Outlook
The Company says it continues to deliver on the value proposition of offering comprehensive solutions that create access to care, leading to better health outcomes. Through its team-based, personalized care approach, CloudMD provides comprehensive solutions to patients, healthcare practitioners, individuals, and enterprise clients through our call center, digitally or in person. The Company has a multi-pronged growth strategy which focuses on organic growth, cost optimization, leveraging of our core assets and accretive mergers and acquisitions.
The Company remains focused on a number of key priorities in 2022 including: (1) Organic growth by continuing to diversify and grow its client base within its EHS and DHS divisions through cross selling capabilities, geographic expansion and providing innovative and best-in-class customer service; (2) Driving continuous operational excellence across the organization to improve productivity, product quality and consistency, and lower customer acquisition costs; (3) delivering a diligent path to profitable financial sustainability and focus on delivering consistent financial performance across all divisions of the organization; and (4) continuing to develop corporate governance to support the Company's growth.
The Company has a near-term focus on streamlining operations, with a plan to profit from the core and leverage its strength as a leader in the employer health markets. CloudMD is focused on driving profitable growth in the markets where we have scale, and strong differentiators in proven service delivery and that have the most attractive growth and profit potential. As such, the Company will undertake a strategic review of some smaller, non-core assets to determine how best to maximize shareholder value.
The Company will continue to deploy its capital prudently and will make investments that support growth in core areas of the business.
Selected Financial Information
All results were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board.
(In thousands of Canadian dollars) |
|
Three months ended |
|
||
|
March 31, |
|
|||
|
2022 |
|
2021 |
(%) |
|
Net loss |
$ |
(5,648) |
$ |
(5,290) |
7% |
Add: |
|
|
|
|
|
Finance costs |
|
497 |
|
88 |
465% |
Income taxes |
|
85 |
|
40 |
113% |
Depreciation and amortization |
|
3,012 |
|
689 |
337% |
EBITDA(1) for the period |
|
(2,054) |
|
(4,473) |
54% |
Share-based compensation |
|
490 |
|
1,595 |
(69%) |
Financing-related costs |
|
- |
|
749 |
(100%) |
Acquisition-related and integration costs, net |
|
2,524 |
|
812 |
211% |
Litigation costs and loss provision |
|
2 |
|
81 |
(98%) |
Change in fair value of liability to non-controlling interests |
|
129 |
|
- |
100% |
Change in fair value of contingent consideration |
|
(2,735) |
|
(315) |
768% |
Adjusted EBITDA for the period (1) |
$ |
(1,644) |
$ |
(1,551) |
(6%) |
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(1) Gross profit is a non-GAAP measure as described in the Non-GAAP Financial Measures section of this news release.
(In thousands of Canadian dollars, except per share amounts) |
|
Three months ended |
|
||
|
March 31, |
|
|||
|
2022 |
|
2021 |
(%) |
|
Revenue |
$ |
41,378 |
$ |
8,775 |
372% |
Cost of sales |
|
(27,912) |
|
(5,184) |
438% |
Gross profit (1) |
|
13,466 |
|
3,591 |
275% |
Gross margin |
|
32.5% |
|
40.9% |
|
|
|
|
|
|
|
Expenses |
|
21,310 |
|
9,132 |
133% |
Loss before other items |
|
(7,844) |
|
(5,541) |
42% |
Other items, taxes |
|
2,196 |
|
251 |
775% |
Net loss |
|
(5,648) |
|
(5,290) |
7% |
Loss per share, basic and diluted |
$ |
(0.02) |
$ |
(0.03) |
(33%) |
(1) EBITDA and Adjusted EBITDA are non-GAAP measures as described in the Non-GAAP Financial Measures section of this news release.
About CloudMD Software & Services
CloudMD is transforming the delivery of healthcare using technology and by providing a patient-centric approach, with an emphasis on continuity of care. By leveraging healthcare technology, the Company is building one, connected platform that addresses all points of a patient's healthcare journey and provides better access to care and improved outcomes.
Through CloudMD's proprietary technology, the Company delivers quality healthcare through a holistic offering including hybrid primary care clinics, specialist care, telemedicine, mental health support, healthcare navigation, educational resources, and artificial intelligence (AI).
CloudMD's business is separated into three main divisions: Clinics and Pharmacies, Digital Solution and Enterprise Health Solutions, the Company's fastest growing division. CloudMD's Enterprise Health Solutions Division has built a leading employer healthcare solutions, including its Comprehensive Integrated Health Services Platform, which offers one comprehensive, digitally connected platform for educational institutions, corporations, insurers, and advisors to better manage the health and wellness of their students, employees, and customers.
CloudMD currently services a direct ecosystem of over 5,700 clinicians including, 1,800+ mental health practitioners, 1,600+ allied health professionals, 1,400+ doctors and nurses and covers 12 million individual lives across North America.
Non-GAAP Financial Measures
In addition to the results reported in accordance with IFRS, the Company uses various non-GAAP financial measures and ratios which are not recognized under IFRS, as supplemental indicators of the Company's operating performance and financial position. These non-GAAP financial measures and ratios are provided to enhance the user's understanding of the Company's historical and current financial performance and its prospects for the future. Management believes that these measures provide useful information in that they exclude amounts that are not indicative of the Company's core operating results and ongoing operations and provide a more consistent basis for comparison between quarters and years. Details of such non-GAAP financial measures and ratios and how they are derived are provided below as well as in conjunction with the discussion of the financial information reported.
Since non-GAAP financial measures do not have any standardized meanings prescribed by IFRS, other companies may calculate these non-IFRS measures differently, and our non-GAAP financial measures may not be comparable to similar titled measures of other companies. Accordingly, investors are cautioned not to place undue reliance on them and are also urged to read all IFRS accounting disclosures presented in the audited consolidated financial statements and the related notes for the year ended December 31, 2021 and 2020.
EBITDA
EBITDA is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. EBITDA referenced herein relates to earnings before interest, taxes, impairment, and depreciation and amortization. This measure does not have a comparable IFRS measure and is used by the Company to assess its capacity to generate profit from operations before taking into account management's financing decisions and costs of consuming intangible and tangible capital assets, which vary according to their vintage, technological currency, and management's estimate of their useful life.
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Adjusted EBITDA referenced herein relates to earnings before interest; taxes; depreciation; amortization; share-based compensation; financing-related costs; acquisition-related and integration costs, net; litigation costs and loss provision; loss on sale of subsidiary; and change in fair value of contingent consideration. This measure does not have a comparable IFRS measure and is used by the Company to assess its capacity to generate profit from operations before taking into account management's financing decisions and costs of consuming intangible and tangible capital assets, which vary according to their vintage, technological currency, and management's estimate of their useful life, adjusted for factors that are unusual in nature or factors that are not indicative of the operating performance of the Company.
Gross Profit
Gross Profit is a non-GAAP financial measure that does not have a standard meaning and may not be comparable to a similar measure disclosed by other issuers. Gross Profit referenced herein relates to revenues less cost sales. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the business.
Gross Margin
Gross Margin is a non-GAAP financial ratio that has Gross Profit, which is a non-GAAP financial measure as a component. Gross Margin referenced herein is defined as gross profit as a percent of total revenue. This measure does not have a comparable IFRS measure and is used by the Company to manage and evaluate the operating performance of the business.
The following table provides a reconciliation of net loss for the periods to EBITDA and Adjusted EBITDA for the three months March 31, 2022 and 2021:
(In thousands of Canadian dollars) |
|
Three months ended |
|
||
|
March 31, |
|
|||
|
2022 |
|
2021 |
(%) |
|
Net loss |
$ |
(5,648) |
$ |
(5,290) |
7% |
Add: |
|
|
|
|
|
Finance costs |
|
497 |
|
88 |
465% |
Income taxes |
|
85 |
|
40 |
113% |
Depreciation and amortization |
|
3,012 |
|
689 |
337% |
EBITDA(1) for the period |
|
(2,054) |
|
(4,473) |
54% |
Share-based compensation |
|
490 |
|
1,595 |
(69%) |
Financing-related costs |
|
- |
|
749 |
(100%) |
Acquisition-related and integration costs, net |
|
2,524 |
|
812 |
211% |
Litigation costs and loss provision |
|
2 |
|
81 |
(98%) |
Change in fair value of liability to non-controlling interests |
|
129 |
|
- |
100% |
Change in fair value of contingent consideration |
|
(2,735) |
|
(315) |
768% |
Adjusted EBITDA for the period (1) |
$ |
(1,644) |
$ |
(1,551) |
(6%) |
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(1) EBITDA and Adjusted EBITDA are non-GAAP measures as described in the Non-GAAP Financial Measures section of this news release.
Stock Options and Restricted Share Units Grant
CloudMD granted 550,000 stock options to acquire 550,000 common shares of the Company to certain officers and directors pursuant to the Company's stock option plan effective as of market close on June 6, 2022, at an exercise price equal to the 5-day VWAP as of June 6, 2022, for a period of 10 years, subject to vesting requirements and any necessary regulatory approvals. CloudMD also granted 250,000 restricted share units ("RSUs"), plus that number of RSUs equal to $265,375 divided by the greater of the 5-day VWAP and the closing price as of June 6, 2022, to certain directors and officers of the Company pursuant to the Company's RSU plan effective as of market close on June 6, 2022, each RSU entitling the holder to acquire one common share the Company in certain circumstances, subject to vesting requirements and any necessary regulatory approvals.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. FORWARD-LOOKING STATEMENTS This press release contains "forward-looking statements" and "forward-looking information" within the meaning of Canadian securities laws. Forward-looking statements in this press release include, but are not limited to, statements with respect to the impact and benefits of the transaction, the mailing of the information circular, anticipated timing for completion of the transaction and receiving the required regulatory, court and shareholder approvals. [ MORE ] |
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