RESTON, Va., Nov. 12, 2021 /PRNewswire/ -- SOC Telemed,
Inc., (NASDAQ: TLMD), the largest national provider of acute care
telemedicine, today announced its financial and operating results
for the third quarter ending September 30,
2021.
SOC Telemed Reports Third Quarter 2021 Financial and Operating
Results
"We are proud of our third quarter results as the new
organization came together with renewed focus resulting in the
highest quarterly revenue and bookings in our company's history,"
said Dr. Chris Gallagher, Chief
Executive Officer. "Upon joining the Company, my first task
has been to launch an enterprise-wide transformation of the legacy
businesses, align our business objectives, and drive greater
efficiencies throughout the organization. Our recently announced
restructuring helps position the Company to continue to lead the
industry, effectively service our clients and grow in line with our
sales momentum. The cost reductions recognized as part of the
restructuring will allow us to invest in areas known to be
important to our market position and growth. We are grateful for
the contributions of all of our employees, including those affected
by the restructuring."
Third Quarter and Recent Highlights
- SOC Telemed took steps to shore up its balance sheet, reaching
an agreement with SLR Investment Corp. to allow the Company to
accelerate the drawdown of an additional $12.5 million in term debt to bolster its cash
position
- In October, the company completed an organizational review and
announced an enterprise-wide restructuring plan, which is expected
to result in $7 million to
$9 million in annualized cost savings
beginning in 2022. The resulting headcount reduction of roughly 12%
of the Company's non-clinical staff and other actions are expected
to result in up to $3 million in
restructuring costs consisting of roughly $2
million in severance and termination benefits and
$1 million for site closures and
other exit and disposal costs
- In September, SOC Telemed and OB Hospitalist Group (OBHG)
announced a collaboration combining OBHG's leading OB hospitalist
programs with SOC Telemed's maternal-fetal medicine (MFM) experts.
The first hospital partner, Hendrick Medical Center in Abilene, Texas, went live with the new service
in August 2021. The combined
hospitalist/teleMFM offering will expand to additional OBHG
hospital sites nationwide
- In September, SOC Telemed announced the appointment of a new
leadership team naming Dr. Chris
Gallagher as CEO, David
Mikula as COO, and Joe
Greskoviak as Vice-Chairman. Additionally, the Company named
David Fletcher as Interim CFO
Operating Metrics Summary
Operational performance metrics for the three months ended
September 30, 2021, compared to the
three months ended September 30,
2020. We present consults on a pro forma basis (i.e., giving
retroactive effect to the Access Physicians acquisition to
January 1, 2020) to provide investors
with insight into how management views the performance of the
combined business period over period.
- Total system-wide consults were 140,743 compared to 79,926, up
76% year over year, and up 32% year over year on a pro forma
basis
- Stand-alone SOC core consults totaled 37,845 compared to
32,126, up 18% on a year over year basis. TelePsychiatry volumes
recovered to pre-COVID levels faster than expected, and the
teleNeurology service line experienced significant volume
increases
- Access Physicians contributed 38,020 core consults, up 44% on a
year over year basis
- System-wide revenue per core consult totaled $328 compared to $345, down 5%, primarily driven by the addition
of Access Physicians, as revenue per core consult at Access
Physicians is historically lower than revenue per core consult at
legacy SOC. The average revenue per core consult is also impacted
by duration of each consult, which varies widely between service
lines
- Stand-alone SOC revenue per core consult was $428 versus $449,
as the volume recovery in telePsychiatry and teleNeurology narrowed
the gap associated with minimum consult thresholds in client
contracts
- Access Physicians revenue per core consult was $229 versus $219,
up 4% year over year, driven by service line volume mix
- Implementations totaled 66 compared to 55, with Access
Physicians contributing 32 implementations
- Stand-alone SOC services per facility totaled 1.9,
demonstrating the continued opportunity to expand across both
service lines and sites with existing customers
- Total facilities serviced were 1,087 compared to 843 a year
ago, up 29% on a year over year basis. The 1,087 facilities
serviced includes 193 facilities serviced by Access Physicians
Financial Results Summary
Financial performance for the three months ended September 30, 2021, compared to the three months
ended September 30, 2020.
- Revenue totaled $26.7 million
compared to $15.1 million, up
76%
- Bookings totaled $9.0 million, up
247%
- Access Physicians contributed $9.7
million of revenue
- GAAP gross profit totaled $8.1
million compared to $5.6
million
- Adjusted gross profit (non-GAAP) totaled $9.5 million compared to $6.6 million
- GAAP gross margin was 30% compared to 37%
- Adjusted gross margin (non-GAAP) was 36% compared to 44%.
Results were negatively impacted primarily by an increase in
physician incentive payments related to the rapid increase and
volatility of consult demand and the lack of availability of fully
licensed and privileged physicians needed to conduct consults
- Net loss totaled $(10.6) million
compared to a net loss of $(9.7)
million
- Adjusted EBITDA loss (non-GAAP) totaled $(5.6) million compared to $(2.9) million
Balance Sheet
As of September 30, 2021, the
Company had cash and cash equivalents of $37.7 million.
Subsequent to quarter end, the Company drew down an additional
$12.5 million from its existing SLR
term loan facility to further improve balance sheet liquidity.
Updated 2021 Financial Outlook
For the full year 2021, SOC Telemed is providing the following
revised financial guidance:
- GAAP Revenue is expected to be in the range of $91.5 million to $93.5
million, with approximately 30% expected to be attributed to
Access Physicians, an increase from the prior guidance range of
$90 million to $92 million
- The upward guidance revision is the result of improved
consultation volume and new implementations
- Adjusted EBITDA is expected to be in the range of $(21.5) million to $(22.5)
million, and improvement from the prior guidance range of
$(22.0) million to $(25.0) million
These statements are forward-looking and actual results may
differ materially. Please refer to the Forward-Looking Statements
safe harbor below for information on the factors that could cause
our actual results to differ materially from these forward-looking
statements.
SOC Telemed has not reconciled its expectations as to Adjusted
EBITDA to the most comparable GAAP measure because certain items
are out of its control or cannot be reasonably calculated or
predicted at this time without unreasonable efforts. Accordingly, a
reconciliation for forward-looking Adjusted EBITDA is not available
without unreasonable effort.
Conference Call Details
The third quarter 2021 earnings conference call and webcast will
be held on November 12, 2021, at
8:00 a.m. ET. The conference call can
be accessed by dialing, either:
Domestic: (877) 292-0959
International: (412) 542-4143
Passcode: reference "SOC Telemed call"
A live audio webcast will be available on the Investor Relations
section of the Company website at investors.soctelemed.com. A
webcast replay will be available for on-demand listening shortly
after the completion of the call at the same web link.
About SOC Telemed
SOC Telemed (NASDAQ: TLMD, "SOC") is the leading national
provider of acute telemedicine technology and solutions to
hospitals, health systems, post-acute providers, physician
networks, and value-based care organizations since 2004. Built on
proven and scalable infrastructure as an enterprise-wide solution,
SOC's technology platform, Telemed IQ, rapidly deploys and
seamlessly optimizes telemedicine programs across the continuum of
care. SOC provides a supportive and dedicated partner presence,
virtually delivering patient care through teleNeurology,
telePsychiatry, teleCritical Care, telePulmonology,
teleCardiology, teleInfectious Disease,
teleNephrology, teleMaternal-Fetal Medicine and other service
lines, enabling healthcare organizations to build sustainable
telemedicine programs across clinical specialties. SOC enables
organizations to enrich their care models and touch more lives by
supplying healthcare teams with industry-leading solutions that
drive improved clinical care, patient outcomes, and organizational
health. The company was the first provider of acute clinical
telemedicine services to earn The Joint Commission's Gold Seal of
Approval and has maintained that accreditation every year since
inception. For more information, visit www.soctelemed.com.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the United States
Private Securities Litigation Reform Act of 1995. In some cases,
you can identify these forward-looking statements by the use of
terms such as "expect," "will," "continue," or similar expressions,
and variations or negatives of these words, but the absence of
these words does not mean that a statement is not forward-looking.
All statements other than statements of historical fact are
statements that could be deemed forward-looking statements,
including, but not limited to: the statements under "Updated 2021
Financial Outlook," including expectations relating to bookings and
revenue; statements regarding the costs and anticipated benefits of
the restructuring plan; statements regarding the statements
regarding borrowings under the SLR term loan facility; statements
regarding relationships with customers and business momentum;
statements regarding the expected benefits of the acquisition of
Access Physicians (including anticipated synergies, projected
financial information and future opportunities); and any other
statements of expectation or belief. These statements are subject
to known and unknown risks, uncertainties and other factors that
may cause our actual results, levels of activity, performance or
achievements to differ materially from results expressed or implied
in this press release. Such risk factors include, but are not
limited to, those related to: the current and future impact of the
COVID-19 pandemic on SOC Telemed's business and industry; continued
difficulties in the integration of Access Physicians; the effects
of competition on the future business of SOC Telemed; uncertainty
regarding the demand for and market utilization of its solution;
returns on investments in its business; the ability to maintain
customer relationships; difficulties maintaining and expanding its
network of qualified physicians and other provider specialists;
disruptions in SOC Telemed's relationships with affiliated
professional entities or third party suppliers or service
providers; general business and economic conditions; the ability of
SOC Telemed to successfully execute strategic plans; the timing and
market acceptance of new solutions or success of new enhancements,
features modifications to existing solutions and the degree to
which they gain acceptance. Additional information concerning these
and other risk factors is contained in the Risk Factors section of
SOC Telemed's most recent annual report on Form 10-K. Additional
information will be made available in SOC Telemed's quarterly
report on Form 10-Q for the three months
ended September 30, 2021, and other filings and reports
that SOC Telemed may file from time to time with the SEC. SOC
Telemed assumes no obligation, and does not intend, to update these
forward-looking statements as a result of future events or
developments.
Use of Non-GAAP Financial Information
We believe that, in addition to our financial results determined
in accordance with GAAP, adjusted gross profit (non-GAAP), adjusted
gross margin (non-GAAP), and adjusted EBITDA, all of which are
non-GAAP financial measures, are useful in evaluating our business,
results of operations, and financial condition. However, our
use of the terms adjusted gross profit, adjusted gross margin and
adjusted EBITDA may vary from that of others in our industry.
Adjusted gross profit, adjusted gross margin and adjusted EBITDA
should not be considered as an alternative to gross profit, net
loss, net loss per share or any other performance measures derived
in accordance with GAAP as measures of performance. Adjusted gross
profit, adjusted gross margin and adjusted EBITDA have important
limitations as analytical tools and you should not consider them in
isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:
- adjusted EBITDA does not reflect the significant interest
expense on our debt;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and adjusted gross profit, adjusted gross
margin and adjusted EBITDA do not reflect any expenditures for such
replacements; and
- other companies in our industry may calculate these financial
measures differently than we do, limiting their usefulness as
comparative measures.
We compensate for these limitations by using these non-GAAP
financial measures along with other comparative tools, together
with GAAP measurements, to assist in the evaluation of operating
performance. Such GAAP measurements include gross profit, net loss,
net loss per share and other performance measures. In evaluating
these financial measures, you should be aware that in the future we
may incur expenses similar to those eliminated in this
presentation. Our presentation of non-GAAP financial measures
should not be construed as an inference that our future results
will be unaffected by unusual or nonrecurring items. When
evaluating our performance, you should consider these non-GAAP
financial measures alongside other financial performance measures,
including the most directly comparable GAAP measures set forth in
the reconciliation tables below and our other GAAP results.
Our non-GAAP financial measures are described as follows:
Adjusted gross profit and adjusted gross
margin. Adjusted gross profit is defined as revenues less
cost of revenues plus depreciation and amortization plus equipment
leasing costs plus stock-based compensation. Adjusted gross margin
is adjusted gross profit divided by revenues.
Adjusted EBITDA. Adjusted EBITDA is defined as net income
(loss) before interest, taxes, depreciation and amortization,
stock-based compensation, gain on contingent shares issuance
liabilities, loss on puttable option liabilities, gain on change in
fair value of contingent consideration, and integration,
acquisition, transaction and executive severance costs.
Readers are encouraged to review the reconciliation of our
non-GAAP financial measures to the comparable GAAP results, which
is attached to this earnings release and which can be found on SOC
Telemed's investor relations page of its website
at: investors.soctelemed.com.
Operating Metrics
Because our consultation fee revenue generally increases as the
number of visits increase, we believe the number of consultations
provides investors with useful information on period-to-period
performance as evaluated by management and as a comparison to our
past financial performance. We define core consultations as
consultations utilizing our 11 core services. Telemed IQ / other
consultations are defined as consultations performed by other
physician networks utilizing our technology platform, Telemed IQ.
Pro forma consultations represent the number of total consultations
as if Access Physicians had been acquired as of January 1, 2020.
Number of
Consults
|
|
|
Q1
2020
|
|
Q2
2020
|
|
Q3
2020
|
|
Q4
2020
|
|
Q1
2021
|
|
Q2
2021
|
|
Q3
2021
|
|
Core
|
|
|
36,347
|
|
|
|
30,213
|
|
|
|
32,126
|
|
|
|
30,920
|
|
|
|
31,447
|
|
|
37,817
|
|
|
37,845
|
|
Access
Physicians
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,282
|
|
|
31,700
|
|
|
38,020
|
|
Telemed IQ /
Other
|
|
|
30,649
|
|
|
|
35,477
|
|
|
|
47,800
|
|
|
|
57,292
|
|
|
|
62,636
|
|
|
60,697
|
|
|
64,878
|
|
Total
Consults
|
|
|
66,996
|
|
|
|
65,690
|
|
|
|
79,926
|
|
|
|
88,212
|
|
|
|
95,365
|
|
|
130,214
|
|
|
140,743
|
|
Number of Pro
Forma Consults
|
|
|
Q1
2020
|
|
Q2
2020
|
|
Q3
2020
|
|
Q4
2020
|
|
Q1
2021
|
|
Q2
2021
|
|
Q3
2021
|
|
Core
|
|
|
36,347
|
|
|
|
30,213
|
|
|
|
32,126
|
|
|
30,920
|
|
|
|
31,447
|
|
|
37,817
|
|
|
37,845
|
|
Access
Physicians
|
|
|
20,067
|
|
|
|
21,577
|
|
|
|
26,357
|
|
|
30,925
|
|
|
|
33,399
|
|
|
31,700
|
|
|
38,020
|
|
Telemed IQ /
Other
|
|
|
31,175
|
|
|
|
35,777
|
|
|
|
48,085
|
|
|
57,642
|
|
|
|
63,001
|
|
|
60,697
|
|
|
64,878
|
|
Total
Consults
|
|
|
87,589
|
|
|
|
87,567
|
|
|
|
106,568
|
|
|
119,487
|
|
|
|
127,847
|
|
|
130,214
|
|
|
140,743
|
|
|
SOC Telemed, Inc.
and Subsidiaries and Affiliates CONSOLIDATED BALANCE
SHEETS (In thousands, except shares and per share
amounts) (Unaudited)
|
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
(from variable interest entities $12,357 and $1,942,
respectively)
|
|
$
|
37,727
|
|
|
$
|
38,754
|
|
Accounts receivable, net of
allowance for doubtful accounts of $488 and $447
(from variable interest entities, net of
allowance $12,650 and $8,192, respectively)
|
|
|
14,361
|
|
|
|
8,721
|
|
Inventory
|
|
|
1,303
|
|
|
|
-
|
|
Prepaid expenses and other
current assets (from variable interest entities $15 and $0,
respectively)
|
|
|
4,434
|
|
|
|
1,609
|
|
Total current assets
|
|
|
57,825
|
|
|
|
49,084
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
3,855
|
|
|
|
4,092
|
|
Capitalized software costs, net
|
|
|
9,957
|
|
|
|
8,935
|
|
Intangible assets, net
|
|
|
45,081
|
|
|
|
5,988
|
|
Goodwill
|
|
|
155,099
|
|
|
|
16,281
|
|
Deposits and other assets
|
|
|
1,801
|
|
|
|
559
|
|
Total assets
|
|
$
|
273,618
|
|
|
$
|
84,939
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Accounts payable (from variable interest entities $3,100 and $692,
respectively)
|
|
$
|
5,387
|
|
|
$
|
2,809
|
|
Accrued expenses (from variable interest entities $3,303 and
$1,349, respectively)
|
|
|
11,163
|
|
|
|
8,293
|
|
Deferred revenues
|
|
|
520
|
|
|
|
610
|
|
Capital lease obligations
|
|
|
22
|
|
|
|
-
|
|
Other Current Liabilities
|
|
|
282
|
|
|
|
-
|
|
Stock-based compensation liabilities
|
|
|
-
|
|
|
|
4,228
|
|
Total current liabilities
|
|
|
17,374
|
|
|
|
15,940
|
|
|
|
|
|
|
|
|
|
|
Deferred revenues
|
|
|
960
|
|
|
|
923
|
|
Capital lease obligations
|
|
|
52
|
|
|
|
-
|
|
Long-term debt, net of unamortized discount and debt issuance
costs
|
|
|
73,897
|
|
|
|
-
|
|
Contingent shares issuance liabilities
|
|
|
2,725
|
|
|
|
12,450
|
|
Other long-term liabilities (from variable interest entities $0 and
$157, respectively)
|
|
|
403
|
|
|
|
560
|
|
Total
liabilities
|
|
$
|
95,411
|
|
|
$
|
29,873
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES (Note 16)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Class A common stock,
$0.0001 par value; 500,000,000 shares authorized as of
September 30, 2021, and December 31, 2020;
98,853,186 and 74,898,380 shares
issued and outstanding at September 30,
2021, and December 31, 2020,
respectively.
|
|
|
10
|
|
|
|
8
|
|
Preferred stock, $0.0001 par
value, 5,000,000 shares authorized; none issued and
outstanding as of September 30, 2021, and
December 31, 2020, respectively.
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in
capital
|
|
|
452,115
|
|
|
|
291,277
|
|
Accumulated
deficit
|
|
|
(273,918)
|
|
|
|
(236,219)
|
|
Total stockholders'
equity
|
|
|
178,207
|
|
|
|
55,066
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$
|
273,618
|
|
|
$
|
84,939
|
|
SOC Telemed, Inc.
and Subsidiaries and Affiliates CONSOLIDATED STATEMENTS
OF OPERATIONS (In thousands, except shares and per share
amounts) (Unaudited)
|
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
Revenues
|
|
$
|
26,684
|
|
|
$
|
15,132
|
|
|
$
|
66,465
|
|
|
$
|
43,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
18,561
|
|
|
|
9,534
|
|
|
|
45,265
|
|
|
|
29,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative
|
|
|
21,247
|
|
|
|
11,993
|
|
|
|
64,987
|
|
|
|
30,267
|
|
Changes in
fair value of contingent consideration
|
|
|
(318)
|
|
|
|
-
|
|
|
|
(3,265)
|
|
|
|
|
|
Total operating expenses
|
|
|
20,929
|
|
|
|
11,993
|
|
|
|
61,722
|
|
|
|
30,267
|
|
Loss from operations
|
|
|
(12,806)
|
|
|
|
(6,395)
|
|
|
|
(40,522)
|
|
|
|
(16,051)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on contingent
shares issuance liabilities
|
|
|
4,081
|
|
|
|
-
|
|
|
|
9,725
|
|
|
|
-
|
|
Loss on puttable
option liabilities
|
|
|
-
|
|
|
|
(412)
|
|
|
|
-
|
|
|
|
(517)
|
|
Interest
expense
|
|
|
(1,775)
|
|
|
|
(2,853)
|
|
|
|
(5,047)
|
|
|
|
(8,469)
|
|
Interest expense –
Related party
|
|
|
-
|
|
|
|
(21)
|
|
|
|
(2,026)
|
|
|
|
(21)
|
|
Total other income (expense)
|
|
|
2,306
|
|
|
|
(3,286)
|
|
|
|
2,652
|
|
|
|
(9,007)
|
|
Loss before income taxes
|
|
|
(10,500)
|
|
|
|
(9,681)
|
|
|
|
(37,870)
|
|
|
|
(25,058)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
(expense)
|
|
|
(146)
|
|
|
|
(7)
|
|
|
|
171
|
|
|
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and
comprehensive loss
|
|
$
|
(10,646)
|
|
|
$
|
(9,688)
|
|
|
$
|
(37,699)
|
|
|
$
|
(25,068)
|
|
Accretion of
contingently redeemable preferred stock
|
|
|
-
|
|
|
|
(2,152)
|
|
|
|
-
|
|
|
|
(5,670)
|
|
Net loss
attributable to common stockholders
|
|
$
|
(10,646)
|
|
|
$
|
(11,840)
|
|
|
$
|
(37,699)
|
|
|
$
|
(30,738)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.11)
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.43)
|
|
|
$
|
(0.89)
|
|
Diluted
|
|
$
|
(0.11)
|
|
|
$
|
(0.34)
|
|
|
$
|
(0.43)
|
|
|
$
|
(0.89)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute net loss per share attributable to common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
98,377,279
|
|
|
|
34,345,197
|
|
|
|
88,675,997
|
|
|
|
34,345,197
|
|
Diluted
|
|
|
98,377,279
|
|
|
|
34,345,197
|
|
|
|
88,675,997
|
|
|
|
34,345,197
|
|
SOC Telemed, Inc.
and Subsidiaries and Affiliates
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(37,699)
|
|
|
$
|
(25,068)
|
|
Adjustments to
reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
6,723
|
|
|
|
4,008
|
|
Stock-based
compensation
|
|
|
13,331
|
|
|
|
1,280
|
|
Change in fair value
of contingent consideration
|
|
|
(3,265)
|
|
|
|
-
|
|
Loss on puttable
option liabilities
|
|
|
-
|
|
|
|
517
|
|
(Gain) on contingent
shares issuance liabilities
|
|
|
(9,725)
|
|
|
|
-
|
|
Bad debt
expense
|
|
|
66
|
|
|
|
64
|
|
Accrued interest on
convertible bridge debt (related party)
|
|
|
-
|
|
|
|
21
|
|
Paid-in kind interest
on long-term debt
|
|
|
203
|
|
|
|
2,310
|
|
Amortization of debt
issuance costs and issuance discount
|
|
|
3,737
|
|
|
|
1,073
|
|
Income tax
benefit
|
|
|
(241)
|
|
|
|
-
|
|
Change in assets and
liabilities, net of acquisitions
|
|
|
|
|
|
|
|
|
Accounts
receivable, net of allowance
|
|
|
(104)
|
|
|
|
1,661
|
|
Prepaid
expense and other current assets
|
|
|
(2,189)
|
|
|
|
(599)
|
|
Inventory
|
|
|
79
|
|
|
|
-
|
|
Deposits
and other non-current assets
|
|
|
(957)
|
|
|
|
32
|
|
Accounts
payable
|
|
|
115
|
|
|
|
891
|
|
Accrued
expenses and other liabilities
|
|
|
1,809
|
|
|
|
1,657
|
|
Deferred
revenues
|
|
|
(53)
|
|
|
|
213
|
|
Net cash used in operating activities
|
|
|
(28,170)
|
|
|
|
(11,940)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Capitalization
of software development costs
|
|
|
(3,099)
|
|
|
|
(3,252)
|
|
Purchase
of property and equipment
|
|
|
(989)
|
|
|
|
(1,724)
|
|
Acquisition of business, net of cash
|
|
|
(90,306)
|
|
|
|
-
|
|
Net cash used in
investing activities
|
|
|
(94,394)
|
|
|
|
(4,976)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Principal
payments under capital lease obligations
|
|
|
(6)
|
|
|
|
(66)
|
|
Proceeds
from long-term debt, net of discount
|
|
|
82,980
|
|
|
|
3,961
|
|
Proceeds
from Related-party – Unsecured subordinated promissory note, net
of
unamortized
discount
|
|
|
11,474
|
|
|
|
-
|
|
Repayment
of long-term debt
|
|
|
(10,795)
|
|
|
|
-
|
|
Repayment
of Related-party – Unsecured subordinated promissory
note
|
|
|
(13,703)
|
|
|
|
-
|
|
Proceeds
from exercise of stock options
|
|
|
42
|
|
|
|
-
|
|
Payment of
deferred transaction related costs
|
|
|
-
|
|
|
|
(63)
|
|
Issuance
of contingently redeemable preferred stock
|
|
|
-
|
|
|
|
10,938
|
|
Proceeds
from issuance of Class A Common Stock, net of issuance
costs
|
|
|
51,545
|
|
|
|
-
|
|
Net cash provided by financing activities
|
|
|
121,537
|
|
|
|
14,770
|
|
|
|
|
|
|
|
|
|
|
NET DECREASE IN CASH
AND CASH EQUIVALENTS
|
|
|
(1,027)
|
|
|
|
(2,146)
|
|
Cash and cash
equivalents at beginning of the period
|
|
|
38,754
|
|
|
|
4,541
|
|
Cash and cash
equivalents at end of the period
|
|
$
|
37,727
|
|
|
$
|
2,395
|
|
|
|
|
|
|
|
|
|
|
SOC Telemed,
Inc. and Subsidiaries and
Affiliates RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES (In thousands, except per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
|
Three Months
Ended
September 30,
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
% Change
|
|
|
Change
|
|
|
% Change
|
|
|
|
(dollars in
thousands)
|
|
Revenues
|
|
$
|
26,684
|
|
|
$
|
15,132
|
|
|
$
|
66,465
|
|
|
$
|
43,493
|
|
|
$
|
11,552
|
|
|
|
76
|
%
|
|
$
|
22,972
|
|
|
|
53
|
%
|
Cost of
revenues
|
|
|
18,561
|
|
|
|
9,534
|
|
|
|
45,265
|
|
|
|
29,277
|
|
|
|
9,027
|
|
|
|
95
|
%
|
|
|
15,988
|
|
|
|
55
|
%
|
Gross
profit
|
|
|
8,123
|
|
|
|
5,598
|
|
|
|
21,200
|
|
|
|
14,216
|
|
|
|
2,525
|
|
|
|
45
|
%
|
|
|
6,984
|
|
|
|
49
|
%
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (a)
|
|
|
1,322
|
|
|
|
1,004
|
|
|
|
3,766
|
|
|
|
2,807
|
|
|
|
318
|
|
|
|
32
|
%
|
|
|
959
|
|
|
|
34
|
%
|
Equipment leasing
costs (b)
|
|
|
-
|
|
|
|
15
|
|
|
|
8
|
|
|
|
57
|
|
|
|
(15)
|
|
|
|
(100)
|
%
|
|
|
(49)
|
|
|
|
(86)
|
%
|
Stock-based
compensation (e)
|
|
|
31
|
|
|
|
-
|
|
|
|
37
|
|
|
|
-
|
|
|
|
31
|
|
|
|
*
|
|
|
|
37
|
|
|
|
*
|
|
Adjusted gross
profit
|
|
$
|
9,476
|
|
|
$
|
6,617
|
|
|
$
|
25,011
|
|
|
$
|
17,080
|
|
|
|
2,859
|
|
|
|
43
|
%
|
|
|
7,931
|
|
|
|
46
|
%
|
Adjusted gross
margin (as a percentage of revenues)
|
|
|
36
|
%
|
|
|
44
|
%
|
|
|
38
|
%
|
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30
|
|
|
Nine Months
Ended
September 30,
|
|
|
Three Months
Ended
September 30
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2021
|
|
|
2020
|
|
|
2021
|
|
|
2020
|
|
|
Change
$
|
|
|
Change
%
|
|
|
Change
$
|
|
|
Change
%
|
|
|
|
(dollars in
thousands)
|
|
Net loss
|
|
$
|
(10,646)
|
|
|
$
|
(9,688)
|
|
|
$
|
(37,699)
|
|
|
$
|
(25,068)
|
|
|
$
|
(958)
|
|
|
|
10
|
%
|
|
$
|
(12,631)
|
|
|
|
50
|
%
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense (c)
|
|
|
1,775
|
|
|
|
2,874
|
|
|
|
7,073
|
|
|
|
8,490
|
|
|
|
(1,099)
|
|
|
|
(38)
|
%
|
|
|
(1,417)
|
|
|
|
(17)
|
%
|
Income tax (benefit)
expense (d)
|
|
|
146
|
|
|
|
7
|
|
|
|
(171)
|
|
|
|
10
|
|
|
|
139
|
|
|
|
*
|
|
|
|
(181)
|
|
|
|
*
|
|
Depreciation and
amortization (a)
|
|
|
2,618
|
|
|
|
1,401
|
|
|
|
6,759
|
|
|
|
4,008
|
|
|
|
1,217
|
|
|
|
87
|
%
|
|
|
2,751
|
|
|
|
69
|
%
|
Stock-based
compensation (e)
|
|
|
2,686
|
|
|
|
1,033
|
|
|
|
13,330
|
|
|
|
1,280
|
|
|
|
1,653
|
|
|
|
160
|
%
|
|
|
12,050
|
|
|
|
941
|
%
|
Loss on puttable
option
liabilities (g)
|
|
|
-
|
|
|
|
412
|
|
|
|
-
|
|
|
|
517
|
|
|
|
(412)
|
|
|
|
(100)
|
%
|
|
|
(517)
|
|
|
|
(100)
|
%
|
Gain on contingent
shares issuance
liabilities (f)
|
|
|
(4,081)
|
|
|
|
-
|
|
|
|
(9,725)
|
|
|
|
-
|
|
|
|
(4,081)
|
|
|
|
*
|
|
|
|
(9,725)
|
|
|
|
*
|
|
Gain on change in fair value of contingent
consideration (h)
|
|
|
(318)
|
|
|
|
-
|
|
|
|
(3,265)
|
|
|
|
-
|
|
|
|
(318)
|
|
|
|
*
|
|
|
|
(3,265)
|
|
|
|
*
|
|
Integration,
acquisition,
transaction, and
executive
severance costs (i)
|
|
|
2,228
|
|
|
|
1,018
|
|
|
|
8,137
|
|
|
|
3,521
|
|
|
|
1,210
|
|
|
|
119
|
%
|
|
|
4,616
|
|
|
|
131
|
%
|
Adjusted
EBITDA
|
|
$
|
(5,592)
|
|
|
$
|
(2,943)
|
|
|
$
|
(15,561)
|
|
|
$
|
(7,242)
|
|
|
|
(2,649)
|
|
|
|
90
|
%
|
|
|
(8,319)
|
|
|
|
115
|
%
|
|
|
Three Months
Ended
September 30,
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
% Change
|
|
|
|
(dollars in
thousands)
|
|
Selling, general and
administrative expenses (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
2,371
|
|
|
$
|
1,936
|
|
|
$
|
435
|
|
|
|
23
|
%
|
Research and
development
|
|
|
637
|
|
|
|
398
|
|
|
|
239
|
|
|
|
60
|
%
|
Operations
|
|
|
2,656
|
|
|
|
2,357
|
|
|
|
299
|
|
|
|
13
|
%
|
General and
administrative
|
|
|
15,583
|
|
|
|
7,302
|
|
|
|
8,281
|
|
|
|
113
|
%
|
Total
|
|
$
|
21,247
|
|
|
$
|
11,993
|
|
|
$
|
9,254
|
|
|
|
77
|
%
|
(1)
Selling, general, and administrative expenses include the following
expenses for the periods presented:
|
|
|
|
Three Months Ended
September 30, 2021
|
|
|
Three Months Ended
September 30, 2020
|
|
|
|
Stock-Based
Compensation
|
|
|
Depreciation
and
Amortization
|
|
|
Integration
Costs
|
|
|
Stock-Based
Compensation
|
|
|
Depreciation
and
Amortization
|
|
|
Integration
Costs
|
|
|
|
(dollars in
thousands)
|
|
Sales and
marketing
|
|
$
|
151
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
3
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Research and
development
|
|
|
185
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
-
|
|
|
|
-
|
|
Operations
|
|
|
169
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10
|
|
|
|
-
|
|
|
|
-
|
|
General and
administrative
|
|
|
2,151
|
|
|
|
1,296
|
|
|
|
2,228
|
|
|
|
1,012
|
|
|
|
397
|
|
|
|
1,018
|
|
Total
|
|
$
|
2,656
|
|
|
$
|
1,296
|
|
|
$
|
2,228
|
|
|
$
|
1,033
|
|
|
$
|
397
|
|
|
$
|
1,018
|
|
|
|
Three Months
Ended
September 30,
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
% Change
|
|
|
|
(dollars in
thousands)
|
|
Selling, general and
administrative expenses excluding
stock-based compensation, depreciation and amortization
and integration costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
2,220
|
|
|
$
|
1,931
|
|
|
$
|
289
|
|
|
|
15
|
%
|
Research and
development
|
|
|
452
|
|
|
|
392
|
|
|
|
60
|
|
|
|
15
|
%
|
Operations
|
|
|
2,487
|
|
|
|
2,346
|
|
|
|
141
|
|
|
|
6
|
%
|
General and
administrative
|
|
|
9,908
|
|
|
|
4,887
|
|
|
|
5,021
|
|
|
|
103
|
%
|
Total
|
|
$
|
15,067
|
|
|
$
|
9,556
|
|
|
$
|
5,511
|
|
|
|
58
|
%
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
% Change
|
|
|
|
(dollars in
thousands)
|
|
Selling, general and
administrative expenses (1):
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
7,358
|
|
|
$
|
4,920
|
|
|
$
|
2,438
|
|
|
|
50
|
%
|
Research and
development
|
|
|
1,695
|
|
|
|
940
|
|
|
|
755
|
|
|
|
80
|
%
|
Operations
|
|
|
7,718
|
|
|
|
6,539
|
|
|
|
1,179
|
|
|
|
18
|
%
|
General and
administrative
|
|
|
48,216
|
|
|
|
17,868
|
|
|
|
30,348
|
|
|
|
170
|
%
|
Total
|
|
$
|
64,987
|
|
|
$
|
30,267
|
|
|
$
|
34,720
|
|
|
|
115
|
%
|
(1)
Selling, general, and administrative expenses include the following
expenses for the periods presented:
|
|
|
|
Nine Months Ended
September 30, 2021
|
|
|
Nine Months Ended
September 30, 2020
|
|
|
|
Stock-Based
Compensation
|
|
|
Depreciation
and
Amortization
|
|
|
Integration
Costs
|
|
|
Stock-Based
Compensation
|
|
|
Depreciation
and
Amortization
|
|
|
Integration
Costs
|
|
|
|
(dollars in
thousands)
|
|
Sales and
marketing
|
|
$
|
494
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
18
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Research and
development
|
|
|
459
|
|
|
|
-
|
|
|
|
-
|
|
|
|
48
|
|
|
|
-
|
|
|
|
-
|
|
Operations
|
|
|
484
|
|
|
|
-
|
|
|
|
-
|
|
|
|
45
|
|
|
|
-
|
|
|
|
-
|
|
General and
administrative
|
|
|
11,856
|
|
|
|
2,993
|
|
|
|
8,137
|
|
|
|
1,169
|
|
|
|
1,201
|
|
|
|
3,521
|
|
Total
|
|
$
|
13,293
|
|
|
$
|
2,993
|
|
|
$
|
8,137
|
|
|
$
|
1,280
|
|
|
$
|
1,201
|
|
|
$
|
3,521
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
|
|
|
|
|
|
2021
|
|
|
2020
|
|
|
Change
|
|
|
% Change
|
|
|
|
(dollars in
thousands)
|
|
Selling, general and
administrative expenses excluding
stock-based compensation, depreciation and amortization
and integration costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
marketing
|
|
$
|
6,864
|
|
|
$
|
4,902
|
|
|
$
|
1,962
|
|
|
|
40
|
%
|
Research and
development
|
|
|
1,236
|
|
|
|
892
|
|
|
|
344
|
|
|
|
39
|
%
|
Operations
|
|
|
7,234
|
|
|
|
6,494
|
|
|
|
740
|
|
|
|
11
|
%
|
General and
administrative
|
|
|
25,230
|
|
|
|
11,977
|
|
|
|
13,253
|
|
|
|
111
|
%
|
Total
|
|
$
|
40,564
|
|
|
$
|
24,265
|
|
|
$
|
16,299
|
|
|
|
67
|
%
|
|
|
Explanation of
Non-GAAP Adjustments
|
|
|
(a)
|
Depreciation and
amortization consists primarily of depreciation of fixed assets,
amortization of capitalized software development costs and
amortization of acquisition-related intangible assets, such as
customer relationships, non-compete agreements, and trade names
acquired in connection with business combinations. While
depreciation and amortization are non-cash charges, the assets
being depreciated or amortized will often have to be replaced or
updated in the future, and these measures do not reflect any cash
requirements for these replacements or updates. Additionally, we
incur amortization of acquisition-related intangible assets based
on the portion of the purchase price allocated to intangible assets
and the estimated useful lives of such assets. However, the
purchase price allocated to these assets is not necessarily
reflective of the cost we would incur to internally develop the
intangible asset and we do not believe these charges are reflective
of our operating results in the period incurred. We eliminate these
non-cash charges from our non-GAAP operating results to facilitate
an understanding of our operating and financial performance from
period-to-period.
|
|
|
(b)
|
Equipment leasing
costs consist of the cost of procuring telemedicine equipment
through lease financing. We ceased this practice in the second
quarter of 2017. We eliminate these charges from our non-GAAP
operating results to facilitate an understanding of our operating
and financial performance from period-to-period.
|
|
|
(c)
|
Interest expense
consists primarily of interest incurred on our outstanding
indebtedness and non-cash interest related to the amortization of
debt discount and issuance costs associated with our term loan
agreement. We eliminate these cash and non-cash expenses from our
non-GAAP operating results to facilitate an understanding of our
operating and financial performance from period-to-period within
our presentation of adjusted EBITDA. Adjusted EBITDA is widely used
by investors to measure a company's operating performance without
regard to items, such as interest benefit and expense, income tax
benefit and expense, depreciation and amortization, stock-based
compensation, and other charges and income. We believe adjusted
EBITDA is useful in evaluating our operating performance compared
to that of other companies in our industry as this metric generally
eliminates the effects of certain items that may vary from company
to company for reasons unrelated to overall operating
performance.
|
|
|
(d)
|
We incur income tax
expenses or benefits that are related to prior periods. We
eliminate these expenses from our non-GAAP operating results to
facilitate an understanding of our operating and financial
performance from period-to-period within our presentation of
adjusted EBITDA.
|
|
|
(e)
|
Stock-based
compensation expense consists of expenses for stock options and
other stock-based awards. Although stock-based compensation is a
key incentive offered to our employees, we continue to evaluate our
operating and financial performance excluding stock-based
compensation expenses. Stock-based compensation expenses will recur
in future periods. We evaluate our performance both with and
without these measures because stock-based compensation is a
non-cash expense and can vary significantly over time based on the
timing, size, nature and design of the awards granted, and is
influenced in part by certain factors that are generally beyond our
control, such as the volatility of the market value of our common
stock. In addition, we eliminate stock-based compensation expense
from our non-GAAP operating results to facilitate an understanding
of our operating and financial performance from
period-to-period.
|
|
|
(f)
|
Gain on contingent
share issuance liabilities consists of the change in fair value of
1,875,000 shares of our common stock held by HCMC's sponsor and
subsequently distributed to permitted transferees and were modified
and became subject to forfeiture in connection with the closing of
our Merger Transaction, and 350,000 private placement warrants
granted to HCMC's sponsor subsequently distributed to its permitted
transferees as part of the Merger Transaction. The contingent
shares issuance liabilities are revalued at their fair value every
reporting period.
|
|
|
(g)
|
Loss on puttable
option liabilities consists of changes in the fair value of
puttable option liabilities. We eliminate these non-cash expenses
from our non-GAAP operating results to facilitate an understanding
of our operating and financial performance from
period-to-period.
|
|
|
(h)
|
Gain on change in
fair value of contingent consideration is the change in fair value
of the earnout contingent consideration and the deferred payment in
connection with our acquisition of Access Physicians in Q1 2021.
The contingent consideration is revalued every reporting period
based on the estimation of the likelihood that such contingent
consideration will be earned. We eliminate these non-cash
activities from our non-GAAP operating results to facilitate an
understanding of our operating and financial performance from
period-to-period.
|
|
|
(i)
|
Integration,
acquisition, transaction and executive severance costs represent
the transaction and business integration costs related to our
business combination with Healthcare Merger Corp. in Q4 2020 and
our acquisition of Access Physicians in Q1 2021. These costs
include incremental expenses incurred to affect business
combinations such as advisory, legal, accounting, valuation, and
other professional or consulting fees, as well as other related
incremental executive severance costs. We exclude these costs from
our non-GAAP results as they have no direct correlation to the
operation of our business, and because we believe that the non-GAAP
financial measures excluding these costs provide useful information
about our spending trends to facilitate an understanding of our
operating and financial performance from
period-to-period.
|
Media Relations:
Lauren Shankman
Trevelino/Keller
lshankman@trevelinokeller.com
Investor Relations:
Steve Rubis
Vice President, Investor Relations
SOC Telemed
C: (571) 485-1234
srubis@soctelemed.com
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SOURCE SOC Telemed