MOORESTOWN, N.J., Nov. 4, 2021 /PRNewswire/ -- Tabula Rasa HealthCare, Inc. ("TRHC") (Nasdaq: TRHC), a leading healthcare technology company advancing the safe use of medications, today reported financial results for the third quarter ended September 30, 2021.

"Our improved third quarter revenue growth was driven by continued strength in PACE and our CareVention HealthCare segment. While I am pleased with our markedly improved organic growth, we are not satisfied with these results and are taking a number of important steps to better position the company to deliver higher growth in 2022 and ultimately increase shareholder value," said Calvin H. Knowlton, PhD, TRHC's Chief Executive Officer, Chairman and Founder.

Third Quarter 2021 Financial Results

All comparisons, unless otherwise noted, are to the three months ended September 30, 2020.

• Total revenue - Total revenue of $86.6 million increased 23% compared to $70.5 million in 2020. Total revenue included product revenue of $50.6 million, an increase of 29%, and solutions (i.e., software and services) revenue of $36.0 million, an increase of 15%. The October 2020 acquisition of Personica contributed 6% of inorganic growth during the third quarter.
• Total revenue by segment
• CareVention HealthCare revenue increased 29% to $65.0 million, comprised of $50.3 million of PACE product revenue (up 29%) and $14.7 million of PACE solutions revenue (up 31%). Personica contributed 8% of inorganic growth to overall segment growth and continues to perform in line with our original projections. Our net PACE enrollment for the third quarter represented a continuation of the strong recovery that began in March 2021 with third quarter net enrollment increasing more than three-fold as compared with the third quarter of 2020.
• MedWise HealthCare revenue increased 7% to $21.6 million, primarily comprised of software subscriptions revenue of $11.8 million (up 16%), in-line with our expectations, and medication safety services revenue of $9.5 million (down 4%). Medication safety services revenue fell short of our internal projections with the primary factor being hiring challenges within our tele-pharmacy call centers. As of today, we are adequately staffed to deliver on our fourth quarter medication safety services revenue projections.
• GAAP net loss - Net loss was $17.1 million compared to a net loss of $21.6 million with the improvement driven by a $16.1 million increase in total revenue, offset by a $14.2 million, or 19%, increase in combined cost of revenue, research and development, sales and marketing, and general and administrative expenses. 
• Non-GAAP Adjusted EBITDA - Non-GAAP Adjusted EBITDA of $5.7 million (6.6% margin) increased 12% as compared with $5.1 million (7.2% margin) in 2020. Our investments across the business, led by sales and marketing expenses, have moderated in recent quarters but remain elevated when compared to 2020.
• Non-GAAP Adjusted EBITDA by segment - Excluding $10.9 million of shared services:
• CareVention HealthCare non-GAAP Adjusted EBITDA of $14.0 million (21.6% margin) increased 10% as compared to $12.7 million (25.3% margin) a year ago.
• MedWise HealthCare non-GAAP Adjusted EBITDA of $2.6 million (12.1% margin) increased 159% as compared to $1.0 million (5.0% margin) a year ago.

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."

Future Outlook

Based on current market conditions and our expectations as of today, we are introducing fourth quarter 2021 guidance and revised full year 2021 guidance, as summarized below.

For the fourth quarter 2021, we expect:

• Total revenue in the range of $84 million to $86 million represents growth of 9% to 12%, all of which is organic.
• Adjusted EBITDA in the range of $4 million to $5 million as compared with $4.7 million a year ago.

For the full year 2021, we expect:

• Total revenue in the range of $329.6 million to $331.6 million represents growth of 11% to 12% with organic growth of 7%.
• Adjusted EBITDA in the range of $19.3 million to $20.3 million as compared with $21.8 million a year ago

Quarterly Conference Call

The third quarter 2021 earnings conference call and webcast will be held tomorrow, Friday, November 5, 2021, 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 5917496 or via a live audio webcast available online at TRHC's investor website (ir.trhc.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.trhc.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 5917496.

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 DoseMeRx™ and 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, Adjusted EBITDA margin, and Adjusted Diluted EPS, each of 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 income or loss excluding certain other expenses, which includes interest expense, provision (benefit) for income tax, depreciation and amortization, change in fair value of acquisition-related contingent consideration expense, settlement costs, severance expense incurred in 2021 related to a realignment of resources, acquisition-related expense, and stock-based compensation expense. TRHC defines Adjusted EBITDA margin as Adjusted EBITDA as a percentage of revenue. TRHC defines Adjusted Diluted EPS as net income or loss before fair value adjustments for acquisition-related contingent consideration, amortization of acquired intangibles, amortization of debt discount and issuance costs, settlement costs, severance expense incurred in 2021 related to a realignment of resources, stock-based compensation expense, and the tax impact of those items using a normalized tax rate on pre-tax income (loss) adjusted for those items expressed on a per share basis using weighted average diluted shares outstanding. TRHC considers acquisition-related expense to include non-recurring direct transaction and integration costs, severance, and the impact of purchase accounting adjustments related to the fair value of acquired deferred revenue. 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. Please note that other companies may define their non-GAAP financial measures differently than TRHC.

TRHC presents these non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. TRHC uses these non-GAAP financial measures 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 these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. TRHC also intends to provide these non-GAAP financial measures as part of the company's future earnings discussions and, therefore, their 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 and Adjusted Diluted EPS to their 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 and TRHC's expectations for the remainder of 2021. Such statements are identified by use of the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "should," 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 and other health epidemics; our continuing losses and need to achieve profitability; fluctuations in our financial results; 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; managing our growth effectively; our ability to adequately protect our intellectual property; the requirements of being a public company; our ability to recognize the expected benefits from acquisitions on a timely basis or at all; 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 26, 2021, 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 http://ir.trhc.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.

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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