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    Tabula Rasa HealthCare Reports First Quarter 2022 Results

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    Tabula Rasa HealthCare Reports First Quarter 2022 Results

    05 May 2022
    • First quarter 2022 revenue of $67.1 million from continuing operations includes CareVention HealthCare revenue of $66.3 million, up 19% vs. a year ago
    • Planned sales of PrescribeWellness, SinfoníaRx, and DoseMe expected to add significant liquidity, reduce net debt, and provide financial flexibility
    • GAAP net loss from continuing operations of $20.4 million
    • Adjusted EBITDA of $2.5 million

    MOORESTOWN, N.J., May 5, 2022 /PRNewswire/ -- Tabula Rasa HealthCare, Inc. ("TRHC", the "Company," "we," "us," or "our") (Nasdaq:TRHC), a leading healthcare technology company advancing the safe use of medications, today reported financial results for the first quarter ended March 31, 2022.

    "In early 2022, the Company decided to divest non-core assets to both refine our strategic direction and to unlock shareholder value, recognizing that these businesses are significantly undervalued as part of TRHC. These actions are one of several important and ongoing steps we are taking to deliver profitable growth. With a strengthened balance sheet and renewed focus, we are excited about our go-forward vision and the opportunities to grow our core value-based care business including our offerings targeted at the PACE market and advance our groundbreaking MedWise® science," said Calvin H. Knowlton, PhD, TRHC's Chief Executive Officer, Chairman and Founder.

    Key Financial Results

    (in millions except percentages)


















    Three Months Ended March 31,



    Year over year




    Q1 2022




    2022



    2021



    Change




    Guidance

    Revenue from continuing operations


    $

    67.1


    $

    58.8



    14

    %




    Revenue from discontinued operations


    $

    16.5


    $

    17.9



    (8)

    %




    Total revenue


    $

    83.6


    $

    76.7



    9

    %


    $

    84 - 86

    Total Adjusted EBITDA


    $

    2.5


    $

    3.6



    (30)

    %


    $

    3 - 4

    First Quarter 2022 Financial Results

    All comparisons, unless otherwise noted, are to the three months ended March 31, 2021.

    • Revenue - Revenue from continuing operations of $67.1 million increased 14% compared to $58.8 million in 2021. Product (medication) revenue of $51.0 million increased 22%, while service revenue of $16.1 million decreased 5% from the year ago period. Excluding $2.4 million of revenue related to the CMS Enhanced Medication Therapy Management (EMTM) pilot program included in the first quarter of 2021, service revenue increased 11%. The CMS EMTM pilot program concluded at the end of 2021. Revenue of $16.5 million from the PrescribeWellness, SinfoníaRx, and DoseMe businesses are classified as discontinued operations.
    • GAAP net loss – GAAP net loss from continuing operations of $20.4 million compares to a loss of $13.4 million a year ago, driven in large part by a non-cash $4.1 million long-lived asset impairment charge attributable to the Company's decision to sell PrescribeWellness, SinfoníaRx, and DoseMe. Gross margin, excluding depreciation and amortization, of $14.4 million declined as compared to $14.8 million a year ago. The decline in gross margin was driven by a combination of factors including: 1) the loss of the previously mentioned EMTM revenue; 2) costs associated with initiating our previously announced business process outsourcing (BPO) transition within our PeakTPA third-party administration and electronic health record (i.e. TruChart and PACElogic) services; and 3) increased shipping fees within our CareKinesis pharmacy operations. Combined research and development, sales and marketing, and general and administrative expenses, including stock-based compensation, increased $1.8 million, or 9%. Depreciation and amortization of $5.7 million compares with $4.8 million a year ago.
    • Adjusted EBITDA – Adjusted EBITDA of $2.5 million declined as compared to $3.6 million a year ago due to the lower gross margins and certain higher operating expenses cited above.

    A reconciliation of generally accepted accounting principles ("GAAP") in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

    Recent Developments

    We are in active discussions to sell the PrescribeWellness, SinfoníaRx, and DoseMe businesses. The expected proceeds will provide the Company the financial flexibility to optimize its capital structure, including significantly reducing net debt and increasing liquidity, as well as to focus on its core business. Management expects the divestitures to enable a significantly improved cost structure.

    Operational Metrics

    Given the planned divestitures described above, the below metrics are focused on our core CareVention HealthCare segment.

    • We increased our total PACE participant base by 11% as of March 31, 2022 as compared to the same period a year ago, and our average PACE per member per month revenue increased 8% as of March 31, 2022 as compared to the same period a year ago.
    • With respect to our net PACE enrollment for our CareKinesis pharmacy services, our average monthly sequential growth during the first quarter of 2022 was 0.7%. Our net PACE enrollment during April 2022 increased by 0.8% on a monthly sequential basis as compared to March 2022 and is 10% higher as compared to April 2021.
    • Our PACE backlog as of March 31, 2022 stands at 60 implementations (by product and/or service), valued at $60 million in annual revenue at maturity, which the Company defines as enrollment of 250 participants. By comparison, these figures were 62 implementations and $45 million at December 31, 2021. The sequential growth in backlog versus the end of 2021 was driven by several large new PACE contracts signed in the first quarter of 2022. During the first quarter of 2022, a total of 13 PACE implementations went live, which compares with nine during the fourth quarter of 2021 and three during the first quarter of 2021.

    Business Outlook

    The Company is providing the following forward-looking revenue guidance for its continuing operations and will no longer provide guidance for its discontinued operations (our PrescribeWellness, SinfoníaRx, and DoseMe businesses). This outlook updates the previously issued financial guidance that was provided on February 24, 2022. Until the Company has greater visibility on the timing of a close date on the planned asset sales described above, we are delaying providing adjusted EBITDA guidance at this time but expect to reinstate such guidance later in 2022.






    Year over year growth



    Low


    High



    Low

    High

    Three Months Ended June 31, 2022


    (in millions except percentages)

    CareVention HealthCare revenue


    $

    66


    $

    68



    8%


    11%

    Other revenue from continuing operations


    $


    $

    1



    NM


    NM

    Total revenue from continuing operations


    $

    66


    $

    69



    3%


    7%
































    Year over year growth



    Low


    High



    Low

    High

    Year Ended December 31, 2022


    (in millions except percentages)

    CareVention HealthCare revenue


    $

    276


    $

    282



    11%


    14%

    Other revenue from continuing operations


    $

    2


    $

    4



    NM


    NM

    Total revenue from continuing operations


    $

    278


    $

    286



    7%


    10%


    nm = not meaningful

    With respect to the above guidance, we note the following:

    • For the balance of 2022, the Company is forecasting monthly net enrollment sequential growth within its CareVention pharmacy services to be consistent with the 0.7% monthly sequential growth observed in the first quarter of 2022.

    Upcoming Events

    Members of the Company's executive team will be presenting at the following conferences: (1) RBC Capital Markets Global Healthcare Conference, May 17-18, (2) Benchmark Healthcare House Call Conference, June 2, and (3) Stifel Virtual Cross Sector Insight Conference, June 7-9.

    Quarterly Conference Call

    The first quarter 2022 earnings conference call and webcast will be held tomorrow, Friday, May 6, 2022, at 8:30 a.m. ET. The conference call can be accessed by dialing 844-413-0947 for U.S. participants or 216-562-0423 for international participants, and referencing passcode 6119738 or via a live audio webcast available online at TRHC's investor website (ir.tabularasahealthcare.com). An audio webcast replay will be available approximately two hours after completion of the call for a period of 90 days thereafter at ir.tabularasahealthcare.com and a replay will be available for seven days by dialing 855-859-2056 for U.S. participants or 404-537-3406 for international participants and referencing passcode 2849587.

    About Tabula Rasa HealthCare

    Tabula Rasa HealthCare (TRHC) provides medication safety solutions that empower healthcare professionals and consumers to optimize medication regimens, combatting medication overload and reducing adverse drug events – the fourth leading cause of death in the U.S. TRHC's proprietary technology solutions, including MedWise®, improve patient outcomes, reduce hospitalizations, and lower healthcare costs. TRHC's extensive clinical tele-pharmacy network improves care for patients nationwide. Its solutions are trusted by health plans and pharmacies to help drive value-based care. For more information, visit TRHC.com.

    Non-GAAP Financial Measures

    In addition to reporting all financial information required in accordance with GAAP, TRHC is also reporting Adjusted EBITDA, which is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Adjusted EBITDA consists of net loss plus certain other expenses, which includes interest expense, provision for income tax, depreciation and amortization, impairment charges, business optimization expenses, severance costs, divestiture-related expense, acquisition-related expense, and stock-based compensation expense. TRHC considers business optimization expenses to include contract termination payments, severance, retention payments, and other employee and non-recurring vendor costs incurred related to our business optimization initiatives during 2022. TRHC considers severance costs to include severance payments related to the realignment of our resources. TRHC considers divestiture-related expense to include nonrecurring direct transaction costs. TRHC considers acquisition-related expense to include nonrecurring direct transaction and integration costs. TRHC believes the exclusion of these items assists in providing a more complete understanding of the company's underlying operations results and trends and allows for comparability with TRHC's peer company index and industry and to be more consistent with TRHC's expected capital structure on a going forward basis.

    TRHC presents this non-GAAP financial measure in this release because it considers it to be an important supplemental measure of performance. TRHC uses this non-GAAP financial measure for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. TRHC believes that this non-GAAP financial measure provides additional insight for analysts and investors in evaluating the company's financial and operational performance. TRHC also intends to provide this non-GAAP financial measure as part of the Company's future earnings discussions and, therefore, its inclusion should provide consistency in the Company's financial reporting.

    Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of Adjusted EBITDA to its most directly comparable GAAP measures provided in this release, including in the accompanying tables.

    Safe Harbor Statement

    This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that we believe to be reasonable as of today's date. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include TRHC's expectations regarding healthcare regulations, industry trends, available opportunities to TRHC, the financial and operating performance of TRHC, the impacts of the COVID-19 pandemic, the plans and objectives of management, TRHC's strategic initiatives and the anticipated benefits thereof, and TRHC's expectations for 2022. Such statements are identified by use of the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "should," "goals" and similar expressions. These forward-looking statements are based on management's good-faith expectations, judgements and assumptions as of the date of this press release. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: the impacts of the ongoing COVID-19 pandemic; our continuing losses and need to achieve profitability; fluctuations in our financial and operating results; our ability to manage our cash flows; the volatility of our stock price; the extent to which we are successful in gaining new long-term relationships with clients or retaining existing clients; the acceptance and use of our products and services by PACE organizations; the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable governmental regulations; our ability to maintain relationships with a specified drug wholesaler; increasing consolidation in the healthcare industry; competition from a variety of companies in the healthcare industry; managing our growth effectively; our ability to adequately protect our intellectual property; macroeconomic conditions, including the impact of inflation, on our business and operations; our ability to execute on our planned divestitures of our PrescribeWellness, SinfoníaRx, and DoseMe businesses; and the other risk factors set forth from time to time in our filings with the Securities and Exchange Commission ("SEC"), including those factors discussed under the caption "Risk Factors" in our most recent annual report on Form 10-K, filed with the SEC on February 25, 2022, and in subsequent reports filed with or furnished to the SEC, copies of which are available free of charge within the Investor Relations section of the Tabula Rasa HealthCare website https://ir.tabularasahealthcare.com or upon request from our Investor Relations Department. Tabula Rasa HealthCare assumes no obligation and does not intend to update these forward-looking statements, except as required by law, to reflect events or circumstances occurring after today's date.

     

    UNAUDITED CONSOLIDATED BALANCE SHEETS
    (In thousands)










    March 31


    December 31



    2022


    2021

    Assets 





    Current assets: 







      Cash


    $

    14,449


    $

    9,395

      Restricted cash



    3,839



    6,038

      Accounts receivable, net



    22,439



    21,405

      Inventories



    4,900



    5,444

      Prepaid expenses



    3,643



    3,812

      Client claims receivable



    12,936



    11,257

      Other current assets



    23,987



    18,033

      Current assets of discontinued operations



    202,927



    14,511

        Total current assets



    289,120



    89,895

    Property and equipment, net



    11,139



    11,778

    Operating lease right-of-use assets



    15,299



    16,323

    Software development costs, net



    27,710



    29,254

    Goodwill



    115,323



    115,323

    Intangible assets, net



    43,664



    45,358

    Other assets



    4,548



    3,929

    Noncurrent assets of discontinued operations





    187,558

    Total assets


    $

    506,803


    $

    499,418








    Liabilities and stockholders' equity







    Current liabilities:







      Current operating lease liabilities


    $

    3,335


    $

    3,275

      Accounts payable



    9,537



    8,870

      Client claims payable



    8,789



    8,398

      Accrued expenses and other liabilities



    39,592



    40,997

      Current liabilities of discontinued operations



    14,950



    12,380

        Total current liabilities



    76,203



    73,920

    Line of credit



    57,200



    29,500

    Long-term debt, net



    319,630



    319,299

    Noncurrent operating lease liabilities



    14,753



    15,792

    Deferred income tax liability, net



    1,678



    1,402

    Other long-term liabilities



    1,107



    176

    Noncurrent liabilities of discontinued operations





    3,573

    Total liabilities



    470,571



    443,662








    Stockholders' equity:







      Common stock



    3



    3

      Treasury stock



    (4,292)



    (4,292)

      Additional paid-in capital



    329,061



    320,392

      Accumulated deficit



    (288,540)



    (260,347)

    Total stockholders' equity



    36,232



    55,756



    $

    506,803


    $

    499,418

     

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except share and per share amounts)








    Three Months Ended


    March 31


    2022


    2021

    Revenue:




      Product revenue

    $

    50,973


    $

    41,842

      Service revenue


    16,137



    16,936

        Total revenue


    67,110



    58,778

    Cost of revenue, exclusive of depreciation and amortization shown below:






      Product cost


    39,552



    31,357

      Service cost


    13,169



    12,622

        Total cost of revenue, exclusive of depreciation and amortization


    52,721



    43,979

    Operating expenses: 






      Research and development 


    3,965



    3,059

      Sales and marketing


    2,649



    2,967

      General and administrative 


    15,878



    14,680

      Long-lived asset impairment charge


    4,062



      Depreciation and amortization


    5,742



    4,801

    Total operating expenses 


    32,296



    25,507

    Loss from operations


    (17,907)



    (10,708)

    Interest expense, net


    2,269



    2,547

    Loss from continuing operations before income taxes


    (20,176)



    (13,255)

    Income tax expense


    216



    121

    Net loss from continuing operations


    (20,392)



    (13,376)

    Net loss from discontinued operations, net of tax


    (7,801)



    (6,116)

    Net loss

    $

    (28,193)


    $

    (19,492)







    Net loss per share:






    Net loss per share from continuing operations, basic and diluted

    $

    (0.85)


    $

    (0.58)

    Net loss per share from discontinued operations, basic and diluted


    (0.33)



    (0.27)

    Total net loss per share, basic and diluted

    $

    (1.18)


    $

    (0.85)







    Weighted average common shares outstanding, basic and diluted


    23,865,801



    23,010,531

     

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)










    Three Months Ended



    March 31



    2022


    2021

    Cash flows from operating activities:






    Net loss


    $

    (28,193)


    $

    (19,492)

    Adjustments to reconcile net loss to net cash used in operating activities:







      Depreciation and amortization



    13,073



    11,625

      Amortization of deferred financing costs and debt discount



    468



    635

      Deferred taxes



    276



    174

      Stock-based compensation



    8,609



    8,602

      Acquisition-related contingent consideration paid





    (67)

      Impairment charges



    4,902



      Other noncash items



    (95)










      Changes in operating assets and liabilities:







        Accounts receivable, net



    (5,570)



    3,151

        Inventories



    544



    177

        Prepaid expenses and other current assets



    (7,131)



    (1,247)

        Client claims receivables



    (1,679)



    (924)

        Other assets



    (374)



    (2,610)

        Accounts payable   



    80



    (4,448)

        Accrued expenses and other liabilities



    (2,274)



    2,012

        Client claims payables



    391



    (1,698)

        Other long-term liabilities



    1,238



    32

    Net cash used in operating activities



    (15,735)



    (4,078)








    Cash flows from investing activities:







    Purchases of property and equipment



    (217)



    (522)

    Software development costs



    (8,749)



    (5,863)

    Net cash used in investing activities



    (8,966)



    (6,385)








    Cash flows from financing activities:







    Proceeds from exercise of stock options



    60



    2,226

    Payments for debt financing costs



    (350)



    Borrowings on line of credit



    27,700



    7,500

    Payment of acquisition-related notes payable





    (7,500)

    Payments of acquisition-related contingent consideration





    (99)

    Repayments of long-term debt and finance leases





    (3)

    Net cash provided by financing activities



    27,410



    2,124








    Net increase (decrease) in cash and restricted cash



    2,709



    (8,339)

    Cash and restricted cash, beginning of period



    15,706



    28,532

    Cash and restricted cash, end of period


    $

    18,415


    $

    20,193

     

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP MEASURES
    (In thousands)












    Three Months Ended March 31




    2022


    2021


    Reconciliation of Net Loss to Adjusted EBITDA








    Net loss


    $

    (28,193)


    $

    (19,492)


    Add:








      Interest expense, net



    2,269



    2,547


      Income tax expense



    334



    199


      Depreciation and amortization



    13,073



    11,625


      Impairment charges



    4,902




      Business optimization expenses



    787




      Severance costs



    575




      Divestiture-related expense



    120




      Acquisition-related expense



    46



    118


      Stock-based compensation expense



    8,609



    8,602


    Adjusted EBITDA


    $

    2,522


    $

    3,599


     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/tabula-rasa-healthcare-reports-first-quarter-2022-results-301541181.html

    SOURCE Tabula Rasa HealthCare, Inc.

    Investors, Frank Sparacino, fsparacino@trhc.com, T: 312-451-2157; Media, Anthony Mirenda, amirenda@trhc.com, T: 908-380-2143