Exhibit 99.1

 

 

 

OptimizeRx Reports Fourth Quarter and Full Year 2019 Results; Full Year Revenue up 16% to a Record $24.6 Million

 

ROCHESTER, Mich. – February 27, 2020 – OptimizeRx Corp. (Nasdaq: OPRX), a leading provider of digital health solutions for life science companies and payers, reported results for the fourth quarter and year ended December 31, 2019, with all comparisons to the same year-ago period unless otherwise noted.

 

Financial and Operational Highlights

 

Total revenue in Q4 2019 increased 12% to a record $7.4 million.

 

Total revenue for the full year 2019 was up 16% to a record $24.6 million, with gross margin improving 520 basis points from 57.6% to 62.8% due to a more favorable product mix.

 

Cash and cash equivalents totaled $18.9 million at December 31, 2019.

 

Acquired digital therapeutics SaaS platform provider, RMDY Health, adding three new client segments to OptimizeRx’s existing patient engagement platform: payers, medtech and medical associations.

 

Launched newly integrated platform and secured several enterprise deals to more effectively address the need for greater patient-provider-pharma-payer collaboration and improvement in medication affordability and adherence.

 

Signed an exclusive three year agreement with NewCrop, a provider of integrated electronic prescribing software, to deliver real-time digital health messages to NewCrop’s e-prescribing network of more than 65,000 healthcare professionals.

 

Q4 2019 Financial Summary

 

Net revenue in the fourth quarter of 2019 increased 12% to a record $7.4 million from $6.6 million in the same year-ago quarter. The quarterly increase was primarily due to increased sales of messaging and patient engagement solutions.

 

Over the last year the company has introduced and acquired products and services that have diversified its customer base and revenue streams.

 

Gross margin in the fourth quarter of 2019 was 60.6% versus 62.2% in the year-ago quarter. The decrease in gross margin was due to a shift in product mix. The company expects to maintain gross margins of at least 60% on a quarterly basis.

 

Operating expenses in the fourth quarter of 2019 totaled $6.8 million, increasing from $4.2 million in the same year-ago quarter. The increase was due to additional expenses related to the company’s growth initiatives, including its introduced and acquired products and services such as patient engagement solutions, as well as new hires over the last year. Expenses related to the company’s recent acquisition of RMDY Health totaled approximately $0.8 million in the fourth quarter of 2019.

 

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Net loss on a GAAP basis in the fourth quarter of 2019 totaled $2.0 million or $(0.14) per share, as compared to net loss of $110,000 or $(0.01) per share in the year-ago quarter.

 

Non-GAAP net loss for the fourth quarter of 2019 was $399,000 or $(0.03) per basic and diluted share, compared to non-GAAP net income of $1.4 million or $0.11 per diluted share in the same year-ago period (see definition of these non-GAAP measures and reconciliation to GAAP, below).

 

While the company expects to return to profitability as its revenue grows, one-time expenses related to investments in growth initiatives or non-cash charges could result in a loss in any given quarter. 

 

Cash and cash equivalents totaled $18.9 million at December 31, 2019, as compared to $29.8 million at September 30, 2019 with the majority of the decrease related to the acquisition of RMDY Health. The company has continued to operate debt-free and expects to remain cash-flow positive on a quarterly basis for the foreseeable future.

 

Full Year 2019 Financial Summary

 

Net revenue in 2019 increased 16% to a record $24.6 million compared to $21.2 million in 2018. The increase was primarily due to increased pharmaceutical brands, an increased distribution network, strong growth in the company’s messaging and patient engagement solutions.

 

Gross margin in 2019 improved to 62.8% versus 57.6% in 2018. The improvement was due to a favorable shift in product mix, including an increase in patient engagement revenues that have a much lower cost of sales.

 

Operating expenses increased to $19.1 million in 2019 as compared to $12.0 million in 2018. The increase was due to additional expenses related to the company’s growth initiatives, including its introduced and acquired products and services such as patient engagement solutions, as well as new hires within the last year to drive growth for 2020.

 

Net loss on a GAAP basis totaled $3.1 million or $(0.23) per basic and diluted share in 2019, as compared to a net income of $0.2 million or $0.02 per basic and diluted share in 2018.

 

For the full year, non-GAAP net income totaled $937,000 or $0.07 per basic and diluted share, which compares non-GAAP net income of $3.7 million or $0.31 per diluted share in the year-ago period.

 

Management Commentary

 

“Our topline growth in Q4 and the full year was driven largely by our newer messaging solutions, such as patient engagement,” said OptimizeRx CEO, William Febbo. “During the year, we invested heavily to position the company for strong topline growth. We expanded our commercial team and scaled our client base beyond pharma to include payer, medical device and care management companies. We introduced and acquired new products and services, diversified our revenue streams, and expanded the exclusive partners within our point of care network by adding more than 65,000 healthcare professionals.

 

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“Today, we have the nation’s largest point of care network for our clients along with a complete set of solutions designed to assure greater adherence, affordability and patient engagement—all of which represent enormous market opportunities.

 

“Armed with this comprehensive solution set, we are not only better able to address our existing HCP messaging market, but we can now address the patient engagement, digital therapeutics and care management markets. This takes our total addressable market into the billions of dollars. We sit squarely at the intersection of these large and growing markets with a uniquely powerful digital health platform that can scale along the support of fantastic partners and leading pharma clients.

 

“The power of our platform lies in how we close the communication gap between pharma, payers, physicians and patients like no other solution on the market. Closing this gap with digital solutions has become increasingly important, especially with the wave of new specialty medications coming onto the market and the increasing value being placed on the patient journey when it comes to medication adherence. Better communication translates into better outcomes for patients, lower costs to payers, and for pharma a more engaged field of doctors and patients.

 

“For OptimizeRx, our integrated platform approach allows us to expand within existing clients and address the needs of a much larger group of potential enterprise clients. This has become evident in the growth of our average deal size, which has increased from around $130,000 in 2018 to more than $300,000 coming into 2020. These deals also involve an increasing portion of recurring SaaS revenue and even stickier enterprise engagements.

 

“Looking ahead, we remain focused on driving revenue growth from our core solutions, expanding our network, and seeking solid M&A and partnership opportunities. We expect the results from these initiatives along with our expanded commercial team to drive continued adoption of our health platform across our entire client base in 2020, with this resulting in another year of record growth and market expansion.”

 

Conference Call

 

OptimizeRx management will host a conference call later today to discuss these fourth quarter 2019 results, followed by a question and answer period.

 

Date: Thursday, February 27, 2020

Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

Toll-free dial-in number: 1-888-220-8451

International dial-in number: 1-323-794-2588

Conference ID: 2951536

 

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.

 

Page 3 of 9

 

 

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through March 19, 2020, as well as available for replay via the Investors section of the OptimizeRx website at optimizerx.com/investors.

 

Toll-free replay number: 1-844-512-2921

International replay number: 1-412-317-6671

Replay ID: 2951536

 

Definition and Use of Non-GAAP Financial Measures

 

This earnings release includes a presentation of non-GAAP net income (loss) and non-GAAP earnings (loss) per share or non-GAAP EPS, both of which are non-GAAP financial measures. Starting this quarter, the company changed its definition of non-GAAP net income (loss) and non-GAAP earnings per share or non-GAAP EPS to include acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes.

 

The company defines non-GAAP net income (loss) as GAAP net income (loss) with an adjustment to add back depreciation, amortization, stock-based compensation, acquisition expenses, income or loss related to the fair value of contingent consideration, and deferred income taxes. Non-GAAP EPS is defined as non-GAAP net income (loss) divided by the number of weighted average shares outstanding on a basic and diluted basis. The company has provided non-GAAP financial measures to aid investors in better understanding its performance. Management believes that these non-GAAP financial measures provide additional insight into the operations and cashflow of the company.

 

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash operating expenses, management believes that providing non-GAAP financial measures that excludes non-cash expenses allows for meaningful comparisons between the company’s core business operating results and those of other companies, as well as provides an important tool for financial and operational decision making and for evaluating the company’s own core business operating results over different periods of time.

 

The company’s non-GAAP net income (loss) and non-GAAP EPS measures may not provide information that is directly comparable to that provided by other companies in the company’s industry, as other companies in the industry may calculate such non-GAAP financial results differently. The company’s non-GAAP net income (loss) and non-GAAP EPS are not measurements of financial performance under GAAP and should not be considered as an alternative to operating income or as an indication of operating performance or any other measure of performance derived in accordance with GAAP. The company does not consider these non-GAAP measures to be substitutes for or superior to the information provided by its GAAP financial results.

 

The table, “Reconciliation of non-GAAP to GAAP Financial Measures,” included below, provides a reconciliation of non-GAAP net income (loss) and non-GAAP EPS for the three and 12-month periods ended December 31, 2019 and 2018.

 

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About OptimizeRx

 

OptimizeRx® (NASDAQ: OPRX), a digital health company, connects pharmaceutical companies to patients and providers, offering greater affordability, adherence and brand awareness at the point-of-care. As the nation’s largest digital platform connecting life sciences to the point-of-care, OptimizeRx provides a direct channel for pharma companies, payers, medtech, and medical associations to communicate with healthcare providers right within their workflow and directly to patients.

 

The cloud-based solution supports patient adherence to medications and better healthcare outcomes with real-time access to financial assistance, prior authorization, education and critical clinical information. OptimizeRx provides more than half of the ambulatory patient market with access to these benefits through leading EHR platforms like Allscripts, Amazing Charts and Quest, and directly via its mobile communications digital care management platform.

 

For more information, follow the company on Twitter, LinkedIn or visit www.OptimizeRx.com.

 

Important Cautions Regarding Forward Looking Statements

 

This press release contains forward-looking statements within the definition of Section 27A of the Securities Act of 1933, as amended, and such as in section 21E of the Securities Act of 1934, as amended. These forward-looking statements should not be used to make an investment decision. The words 'estimate,' 'possible' and 'seeking' and similar expressions identify forward-looking statements, which speak only as to the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, competition, and other material risks.

 

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OPTIMIZERx CORPORATION

Consolidated Balance Sheets as of

December 31, 2019 and 2018

 

   December 31,
2019
Unaudited
   December 31,
2018
 
ASSETS        
         
Current Assets        
Cash and cash equivalents  $18,852,680   $8,914,034 
Accounts receivable   7,418,025    6,457,841 
Prepaid expenses   871,043    360,146 
Total Current Assets   27,141,748    15,732,021 
Property and equipment, net   176,014    149,330 
Other Assets          
Goodwill   14,740,031    3,678,513 
Technology Assets, net   6,238,453    104,820 
Patent rights, net   2,550,587    2,766,944 
Right of use assets, net   559,863    - 
Other intangible assets, net   5,151,102    2,387,303 
Security deposits and other assets   80,727    235,647 
Total Other Assets   29,320,763    9,173,227 
TOTAL ASSETS  $56,638,525   $25,054,578 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Current Liabilities          
Accounts payable – trade  $492,995   $411,010 
Accrued expenses   1,800,635    1,300,882 
Revenue share payable   1,618,438    1,908,616 
Current portion of lease liabilities   115,431    - 
Current portion of contingent purchase price payable   1,500,000    - 
Deferred revenue   580,014    610,625 
Total Current Liabilities   6,107,513    4,231,133 
Non-current Liabilities          
Lease obligations, net of current portion   448,753    - 
Contingent purchase price payable   5,220,000    2,365,000 
Total Liabilities   5,668,753    2,365,000 
Stockholders’ Equity          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at December 31, 2019 and 2018,   -    - 
Common stock, $0.001 par value, 500,000,000 shares authorized, 14,600,579 and 12,038,618 shares issued and outstanding at December 31, 2019 and 2018, respectively   14,601    12,039 
Additional paid-in-capital   78,272,268    48,725,211 
Accumulated deficit   (33,424,610)   (30,278,805)
Total Stockholders’ Equity   44,862,259    18,458,445 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY  $56,638,525   $25,054,578 

 

Page 6 of 9

 

  

OPTIMIZERx CORPORATION

Consolidated Statements of Operations

 

 

   For the
year ended
December 31,
2019 (Unaudited)
   For the
year ended
December 31,
2018
   For the
quarter ended December 31,
2019
(Unaudited)
   For the
quarter ended, December 31,
2018
(Unaudited)
 
Revenue  $24,598,274   $21,206,363   $7,379,782   $6,579,268 
Cost of sales   9,158,699    8,999,666    2,906,933    2,485,855 
Gross margin   15,439,575    12,206,697    4,472,849    4,093,413 
                     
Operating expenses                    
Stock-based compensation   2,260,298    2,520,852    490,578    798,866 
Depreciation and amortization   1,282,787    316,502    536,859    153,085 
Other general and administrative expenses   15,590,054    9,189,211    5,763,874    3,266,909 
Total operating expenses   19,133,139    12,026,565    6,791,311    4,218,860 
Income (loss) from operations   (3,693,564)   180,132    (2,318,462)   (125,447)
Other income                    
Interest income   288,028    46,212    95,722    15,533 
Change in fair value of contingent consideration   (635,000)   -    (660,000)   - 
Total other income   (346,972)   46,212    (564,278)   15,533 
Income (loss) before provision for income taxes   (4,040,536)   226,344    (2,882,740)   (109,914)
Income tax (expense) benefit   897,960    -    897,960    - 
Net income (loss)  $(3,142,576)  $226,344   $(1,984,780)  $(109,914)
Weighted average number of shares outstanding - basic   13,387,863    10,832,209    14,548,910    12,013,771 
Weighted average number of shares outstanding - diluted   13,387,863    11,862,991    14,548,910    12,013,771 
Net income (loss) per share - basic  $(0.23)  $0.02   $(0.14)  $(0.01)
Net income (loss) per share – diluted  $(0.23)  $0.02   $(0.14)  $(0.01)

 

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OPTIMIZERx CORPORATION

Consolidated Statements of Cash Flows for the Years

Ended December 31, 2019 and 2018

 

   For the
year ended
December 31,
2019
(Unaudited)
   For the
year ended
December 31,
2018
 
CASH FLOWS FROM OPERATING ACTIVITIES:        
Net income (loss) for the period  $(3,142,576)  $226,344 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Depreciation and amortization   1,282,787    316,502 
Loss on disposal of assets   -    2,401 
Stock-based compensation   2,260,298    2,520,845 
Income tax benefit   (897,960)   - 
Change in fair value of contingent consideration   635,000    - 
Changes in:          
Accounts receivable   (548,830)   (2,789,252)
Prepaid expenses   (343,838)   (319,754)
Accounts payable   (46,249)   (83,319)
Revenue share payable   (290,178)   730,810 
Accrued expenses   (538,639)   226,535 
Deferred revenue   (30,611)   (38,557)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES   (1,660,796)   792,555 
CASH FLOWS FROM INVESTING ACTIVITIES:          
Purchases of property and equipment   (87,717)   (34,362)
Acquisition of intangible assets   (1,500,000)   (56,651)
Cash paid in acquisition, net of cash acquired   (8,994,369)   (5,595,820)
NET CASH USED IN INVESTING ACTIVITIES   (10,582,086)   (5,686,833)
CASH FLOWS FROM FINANCING ACTIVITIES:          
Proceeds from issuance of common stock   21,303,826    8,164,475 
Proceeds from exercise of stock options   877,702    521,264 
Redemption of common stock   -    - 
NET CASH PROVIDED BY FINANCING ACTIVITIES   22,181,528    8,685,739 
NET INCREASE IN CASH AND CASH EQUIVALENTS   9,938,646    3,791,461 
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD   8,914,034    5,122,573 
CASH AND CASH EQUIVALENTS – END OF PERIOD  $18,852,680   $8,914,034 
SUPPLEMENTAL CASH FLOW INFORMATION:          
Cash paid for interest  $-   $- 
Cash paid for income taxes  $-   $- 
NON-CASH INVESTING AND FINANCING ACTIVITIES:          
Exercise of stock warrants  $-   $1,286,424 
Lease liabilities arising from right of use assets   672,809    - 
Common stock issued for debt  $-   $447,000 
Shares issued in connection with acquisitions  $500,000   $500,000 
Non-cash effect of cumulative adjustments to accumulated deficit  $3,229   $142,027 

 

 

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OPTIMIZERx CORPORATION

Reconciliation of non-GAAP to GAAP Financial Measures

(Unaudited)

 

 

   For the Three Months
Ended December 31,
   For the Year
Ended December 31,
 
   2019   2018   2019   2018 
Net income (loss)  $(1,987,780)  $(109,914)  $(3,142,576)  $226,344 
Depreciation and amortization   536,859    153,085    1,282,787    316,502 
Stock-based compensation   490,578    798,866    2,260,298    2,520,852 
Acquisition expenses   799,623    607,670    799,623    607,670 
Income or loss related to the fair value of contingent consideration   660,000    -    635,000    - 
Deferred income taxes   (897,960)   -    (897,960)   - 
Non-GAAP net income (loss)  $(398,680)  $1,449,707   $937,172   $3,671,368 
                     
Non-GAAP net income (loss) per share                    
Basic  $(0.03)  $0.12   $0.07   $0.34 
Diluted  $(0.03)  $0.11   $0.07   $0.31 
Weighted average shares outstanding:                    
Basic   14,548,910    12,013,771    13,387,863    10,832,209 
Diluted   14,548,910    13,217,534    14,279,087    11,862,991 

  

OptimizeRx Contact

Doug Baker, CFO

Tel (248) 651-6568 x807

dbaker@optimizerx.com

 

Media Relations Contact

Maira Alejandra, Media Relations Manager

Tel (754) 245-7070

malejandra@optimizerx.com

 

Investor Relations Contact

Ron Both, CMA

Tel (949) 432-7557

oprx@cma.team

 

 

Page 9 of 9

 


The following information was filed by Optimizerx Corp (OPRX) on Friday, February 28, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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