MedAvail Reports Fourth Quarter and Full Year 2020 Financial Results

March 30, 2021 4:05 PM EDT

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MISSISSAUGA, Ontario & PHOENIX--(BUSINESS WIRE)-- MedAvail Holdings, Inc. (Nasdaq: MDVL) (“MedAvail”) a technology-enabled pharmacy company, today reported financial results for the three months and full year ended December 31, 2020.

MedAvail drives best-in-class medication adherence by embedding its pharmacy services directly into Medicare-focused clinics using its proprietary MedCenter solution across a growing network of locations throughout the US.

“We finished 2020 with strong fourth quarter results as we expanded in California, entered the Michigan market, and deployed 14 MedCenters. During the quarter, we also completed our reverse merger and have since begun trading on the Nasdaq,” said Ed Kilroy, Chief Executive Officer of MedAvail.

Mr. Kilroy continued, “We remain excited about our enormous opportunity to transform the pharmacy experience for Medicare-focused clinics, in addition to our opportunity to partner with customers looking to enhance pharmacy productivity. We are well positioned for growth in 2021 and beyond, with continued momentum in our pipeline as we expand into new markets and deepen our existing customer relationships.”

Fourth Quarter 2020 Financial and Operational Highlights

All comparisons, unless otherwise noted, are to the three months ended December 31, 2019.

  • Total net revenue was $3.1 million, an increase of 112%
  • Total net revenue by segment
    • Retail Pharmacy Services revenue increased 92% to $2.5 million
    • Pharmacy Technology revenue increased 292% to $0.6 million
  • Total MedCenter deployments was 14, representing growth of 75%
  • Net Loss was $12.1 million compared to $5.7 million
  • Adjusted EBITDA losses increased 79% to $8.7 million from $4.9 million
  • Cash, cash equivalents, and restricted cash totaled $58.0 million as of quarter-end

Full Year 2020 Financial and Operational Highlights

All comparisons, unless otherwise noted, are to the twelve months ended December 31, 2019.

  • Total net revenue was $14.0 million, an increase of 270% compared to $3.8 million
  • Total net revenue by segment
    • Retail Pharmacy Services revenue increased 139% to $7.7 million
    • Pharmacy Technology revenue, including one-time deferred contract revenue of $4.7 million, increased 1047% to $6.2 million
  • Total cumulative MedCenter deployments was 57, representing an increase of 185%
  • Net Loss was $26.8 million compared to $21.5 million
  • Adjusted EBITDA losses increased 27% to $23.6 million from $18.8 million

Full Year 2021 Financial Outlook

MedAvail projects total net revenue for 2021 to be in the range of $27.0 million to $34.0 million, which represents growth of 93% to 143% over 2020 revenue of $14.0 million.

About MedAvail

MedAvail Holdings, Inc. (NASDAQ: MDVL) is a technology-enabled pharmacy organization, providing turnkey in-clinic pharmacy services through its proprietary robotic dispensing platform, the MedAvail MedCenter, and home delivery operations, to Medicare clinics. MedAvail helps patients to optimize drug adherence, resulting in better health outcomes. Learn more at www.medavail.com.

Forward Looking Statements

Certain statements included in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," "project," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the Company’s business strategy and market opportunity; potential future revenue projections and growth; expansion plans; and customer partnerships. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of MedAvail's management and are not predictions of actual performance. Forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including but not limited to general economic, financial, legal, political and business conditions and changes in domestic and foreign markets; the potential effects of COVID-19; the outcome of judicial proceedings to which MedAvail is, or may become a party; changes in competitive conditions prevailing in the healthcare sector; the availability of capital; and the other risks discussed under the heading "Risk Factors" in our Current Report on Form 8-K, filed with the Securities and Exchange Commission (“SEC”) on November 18, 2020, and other documents MedAvail files with the SEC in the future. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. These forward-looking statements speak only as of the date hereof and MedAvail specifically disclaims any obligation to update these forward-looking statements.

SOURCE MedAvail Holdings, Inc.

MEDAVAIL HOLDINGS, INC.

Condensed Consolidated Statements of Operations

(US Dollars in thousands, except share and per share data)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

 

2019

 

2020

 

 

2019

Sales:

 

 

 

 

 

 

 

 

 

 

 

Retail Pharmacy Services

$

2,532

 

 

$

1,317

 

 

$

7,728

 

 

$

3,227

 

Pharmacy Technology

 

569

 

 

 

145

 

 

 

6,240

 

 

 

544

 

Total sales

 

3,101

 

 

 

1,462

 

 

 

13,968

 

 

 

3,771

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

Retail Pharmacy Services

 

2,685

 

 

 

1,113

 

 

 

7,744

 

 

 

2,674

 

Pharmacy Technology

 

661

 

 

 

89

 

 

 

1,061

 

 

 

149

 

Total cost of sales

 

3,346

 

 

 

1,202

 

 

 

8,805

 

 

 

2,823

 

Gross profit

 

(245

)

 

 

260

 

 

 

5,163

 

 

 

948

 

Pharmacy operations

 

2,033

 

 

 

1,134

 

 

 

5,687

 

 

 

3,988

 

General and administrative

 

6,019

 

 

 

3,305

 

 

 

16,562

 

 

 

13,285

 

Selling and marketing

 

1,147

 

 

 

939

 

 

 

3,043

 

 

 

3,276

 

Research and development

 

149

 

 

 

297

 

 

 

682

 

 

 

1,106

 

Merger expenses

 

2,083

 

 

 

 

 

 

4,691

 

 

 

 

Goodwill write-off

 

 

 

 

137

 

 

 

 

 

 

137

 

Operating loss

 

(11,676

)

 

 

(5,552

)

 

 

(25,502

)

 

 

(20,844

)

Other loss, net

 

(110

)

 

 

-

 

 

 

(110

)

 

 

 

Interest income

 

29

 

 

 

17

 

 

 

43

 

 

 

45

 

Interest expense

 

(328

)

 

 

(178

)

 

 

(1,241

)

 

 

(734

)

Loss before income taxes

 

(12,085

)

 

 

(5,713

)

 

 

(26,810

)

 

 

(21,533

)

Income tax

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Net loss

$

(12,085

)

 

$

(5,713

)

 

$

(26,810

)

 

$

(21,533

)

Net loss per share - basic and diluted

$

(0.71

)

 

$

(3.52

)

 

$

(4.69

)

 

$

(13.37

)

Weighted average shares outstanding - basic and diluted

 

17,003

 

 

 

1,622

 

 

 

5,722

 

 

 

1,611

 

MEDAVAIL HOLDINGS, INC.

Condensed Consolidated Balance Sheets

(US Dollars in thousands, except share amounts)

 

 

December 31,

 

2020

 

2019

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

57,936

 

 

 

$

8,791

 

 

Restricted cash

60

 

 

 

58

 

 

Accounts receivable (net of allowance for doubtful accounts)

1,520

 

 

 

416

 

 

Inventories

2,817

 

 

 

4,594

 

 

Prepaid expenses and other current assets

1,534

 

 

 

229

 

 

Total current assets

63,867

 

 

 

14,088

 

 

Property, plant and equipment, net

3,795

 

 

 

2,703

 

 

Right-of-use assets

1,239

 

 

 

1,050

 

 

Other assets

203

 

 

 

92

 

 

Goodwill and other intangible assets

227

 

 

 

70

 

 

Total assets

$

69,331

 

 

 

$

18,003

 

 

Liabilities, Temporary Equity and Shareholders’ Deficit

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued liabilities

$

4,512

 

 

 

$

2,345

 

 

Short-term debt

2,161

 

 

 

 

 

Contract liability

275

 

 

 

4,804

 

 

Current portion of lease obligations

665

 

 

 

526

 

 

Total current liabilities

7,613

 

 

 

7,675

 

 

Long-term debt

 

 

 

12,476

 

 

Long-term portion of lease obligations

651

 

 

 

565

 

 

Other liabilities

 

 

 

448

 

 

Total liabilities

8,264

 

 

 

21,164

 

 

Commitments and contingencies

 

 

 

Redeemable preferred shares ($0.001 par value, 10,000,000 shares authorized, and no shares issued and outstanding at December 31, 2020, 14,539,330 shares authorized, and 10,500,440 shares issued and outstanding at December 31, 2019)

 

 

 

93,484

 

 

Stockholders' equity (deficit):

 

 

 

Common shares ($0.001 par value, 100,000,000 shares authorized, 31,816,020 and 1,481,737 shares issued and outstanding at December 31, 2020 and 2019, respectively)

32

 

 

 

8

 

 

Warrants

2,614

 

 

 

698

 

 

Additional paid-in-capital

213,624

 

 

 

30,829

 

 

Accumulated other comprehensive loss

(6,928

)

 

 

(6,950

)

 

Accumulated deficit

(148,275

)

 

 

(121,230

)

 

Total shareholders’ equity (deficit)

61,067

 

 

 

(96,645

)

 

Total liabilities, temporary equity and shareholders’ equity (deficit)

$

69,331

 

 

 

$

18,003

 

 

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: adjusted sales, adjusted operating expenses, EBITDA, and adjusted EBITDA. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We define Adjusted Sales for a particular period as Sales excluding certain items that may not be indicative of our recurring core business operating results, such as adjustments to bad debt reserve or yearend accrual adjustments.

We define Adjusted EBITDA for a particular period as net (loss) income before interest, taxes, depreciation and amortization, and as further adjusted for merger-related expenses, stock-based compensation expense, payroll tax expense related to stock-based compensation, loss on extinguishment of debt, financing related expenses, loss on abandonment and impairment of operating lease assets, non-recurring inventory adjustments and other (income) expense, net.

We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results, like one-time transaction costs related to the reverse merger. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to our historical performance and liquidity as well as comparisons to our competitors' operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.

MEDAVAIL HOLDINGS, INC.

Unaudited Reconciliation of GAAP to Non-GAAP Measures

(US Dollars in thousands)

 

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

 

2019

 

2020

 

 

 

2019

Sales:

$

3,101

 

$

1,462

 

$

13,968

 

 

$

3,771

Adjustments as follows:

 

 

 

 

 

 

 

 

 

 

 

Contract revenue recognition (1)

 

-

 

 

-

 

 

(4,729

)

 

 

-

Bad debt & Service Fees

 

75

 

 

-

 

 

75

 

 

 

-

Adjusted Sales

$

3,176

 

$

1,462

 

$

9,314

 

 

$

3,771

1)

During 2020, the Company and its significant customer agreed that there was no further obligation to the customer and the Company recognized the remaining contract balance as revenue.

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

 

 

2019

 

2020

 

 

 

2019

Gross Profit

$

(245

)

 

$

260

 

$

5,163

 

 

$

948

Contract revenue recognition (1)

 

-

 

 

 

-

 

 

(4,729

)

 

 

-

Bad debt & Service Fees

 

75

 

 

 

-

 

 

75

 

 

 

-

Inventory impairment charges (2)

 

352

 

 

 

-

 

 

429

 

 

 

-

Adjusted Gross Profit

$

182

 

 

$

279

 

$

938

 

 

$

998

1)

During 2020, the Company and its significant customer agreed that there was no further obligation to the customer and the Company recognized the remaining contract balance as revenue.

2)

Inventory impairment consisted of second half write downs for MedCenter inventory to lower cost or market of approximately $179,000, and medication inventory write downs of $250,000.

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

 

2019

 

2020

 

 

 

2019

Operating Expenses

$

11,431

 

$

5,812

 

$

30,665

 

 

$

21,792

Depreciation and amortization

 

251

 

 

569

 

 

895

 

 

 

1,672

Stock-based compensation expense

 

155

 

 

71

 

 

380

 

 

 

354

Merger related expense (1)

 

2,083

 

 

-

 

 

(4,691

)

 

 

-

Adjusted Operating Expenses

$

8,942

 

$

6,310

 

$

26,489

 

 

$

23,110

1)

Merger-related expenses were incurred for costs related to MedAvail's merger with MYOS which was consummated in the 13 weeks ended December 31, 2020.

 

Three Months Ended
December 31,

 

Year Ended
December 31,

 

2020

 

 

 

2019

 

 

2020

 

 

 

2019

 

Net loss

$

(12,085

)

 

$

(5,713

)

 

$

(26,810

)

 

$

(21,533

)

Adjustments to calculate EBITDA:

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

299

 

 

 

161

 

 

 

1,198

 

 

 

689

 

Income tax

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Depreciation and amortization

 

298

 

 

 

469

 

 

 

1,089

 

 

 

1,672

 

EBITDA

 

(11,488

)

 

(4,983

)

 

(24,523

)

 

(19,172

)

Adjustments as follows:

 

 

 

 

 

 

 

 

 

 

 

Bad debt & Service Fees

 

75

 

 

 

-

 

 

 

75

 

 

 

-

 

Stock-based compensation expense

 

155

 

 

 

71

 

 

 

380

 

 

 

354

 

Merger related expense (1)

 

2,083

 

 

 

-

 

 

 

4,691

 

 

 

-

 

Other (income) loss, net

 

110

 

 

 

-

 

 

 

110

 

 

 

-

 

Inventory impairment charges (2)

 

352

 

 

 

-

 

 

 

429

 

 

 

-

 

Loss on impairment of lease related to unused leased property

 

-

 

 

 

13

 

 

 

-

 

 

 

27

 

Contract revenue recognition (3)

 

-

 

 

 

-

 

 

 

(4,729

)

 

 

-

 

Adjusted EBITDA

$

(8,713

)

 

$

(4,899

)

 

$

(23,567

)

 

$

(18,791

)

1)

Merger-related expenses were incurred for costs related to MedAvail's merger with MYOS, which was consummated in the 13 weeks ended December 31, 2020.

2)

Inventory impairment consisted of second half write-downs for MedCenter inventory to lower cost or market of approximately $179,000, and medication inventory write-downs of $250,000.

3)

During 2020, the Company and its significant customer agreed that there was no further obligation to the customer and the Company recognized the remaining contract balance as revenue.

 

Investor Relations
Caroline Paul
Gilmartin Group
ir@medavail.com

Source: MedAvail Holdings Inc.



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