Upgrade to SI Premium - Free Trial

LifeMD, Inc. Reports First Quarter 2023 Results; Record Revenues and Adjusted EBITDA

May 12, 2023 7:30 AM

NEW YORK, May 12, 2023 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the first quarter ended March 31, 2023. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today, May 12, 2023, at 8:30 a.m. Eastern Time to discuss the results. An updated corporate presentation was posted to https://ir.lifemd.com/#/ prior to market open.

First Quarter Financial Highlights

Q1 and Recent Operational Highlights

Subsequent Events

Key Performance Metrics

($ in 000s) Three Months Ended March 31, Y-o-Y
Key Performance Metrics 2023 2022 % Growth
Revenue
Telehealth $20,203 $22,598 -11%
WorkSimpli $12,923 $6,445 101%
Total Revenue $33,126 $29,043 14%
Subscription Revenue as % of Total 94% 92% 2%
Active Subscribers
Telehealth Active Subscribers 179,933 157,483 14%
WorkSimpli Active Subscribers 173,333 105,050 65%
Total Active Subscribers 353,266 262,533 35%

Management Commentary “LifeMD started the year with tremendous performance in the first quarter of 2023. We exceeded our previous guidance for both Revenue and Consolidated Adjusted EBITDA, with record performance in both metrics. Importantly, and consistent with guidance we gave throughout 2022, our telehealth business returned to meaningful double digit revenue growth with sequential revenue in the first quarter of 2023 increasing 23% versus the fourth quarter of 2022. WorkSimpli continued to outperform, achieving EBITDA margins in the first quarter exceeding 20%, while executing numerous impactful launches, including expansion of its products to numerous new languages, launching digital signature capabilities, and executing several product enhancements to its product and forms suite.” said Justin Schreiber, Chairman & CEO of LifeMD. “Looking ahead, we remain extremely well positioned to accelerate our performance in 2023 anchored by strong lifestyle healthcare brands, a rapidly growing Virtual Primary Care (VPC) platform, recent successful launches of new product offerings, a healthy B2B pipeline, a strengthened balance sheet, and a highly profitable subsidiary producing significant cash flow that can help us further accelerate the core telehealth business.”

LifeMD CFO Marc Benathen, commented: “Our first quarter performance was extremely strong, exceeding guidance on both the top- and bottom-line, while producing substantial sequential revenue growth across both our telehealth and WorkSimpli businesses. Operationally, we also achieved several record performance levels, including consolidated Gross Margins of 87%, continued reductions in our G&A, Selling & Marketing spend as a percentage of Revenue. and a 40% improvement in First Year Lifetime Patient Value (LTV). We are particularly proud to report tat net of Accounts Payable timing, LifeMD’s cash burn reduced to just $678K and we are well on our way to achieving our guidance of Free Cash Flow positivity by mid-2023. Additionally, during the quarter we completed a significant institutional debt financing arrangement with Avenue Capital, providing up to $40 million of total funding capacity, which we believe puts us a in a very strong long-term capital position when combined with our growing profits.”

Financial GuidanceFor the Second Quarter 2023, the Company expects:

For the Full Year 2023, the Company re-affirms guidance of:

Conference CallLifeMD’s management will host a conference call today, May 12, 2023 at 8:30 am Eastern Time to discuss the Company’s financial results and outlook, followed by a question-and-answer period. Details for the call are as follows:

Toll-free dial-in number:1-877-704-4453
International dial-in number:1-201-389-0920
Conference ID:13738585
Webcast:https://viavid.webcasts.com/starthere.jsp?ei=1613338&tp_key=c0937faa82

The conference call will be webcast live and available for replay via a link provided in the Investors section of the Company’s website at ir.lifemd.com. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.

Listeners are encouraged to review the Company’s periodic reports filed with the U.S. Securities and Exchange Commission, including the discussion of risk factors, historical results of operations, and financial condition as provided in these reports.

About LifeMDLifeMD is a 50-state direct-to-patient telehealth company with a portfolio of brands that offer virtual primary care, diagnostics, and specialized treatment for men’s and women’s health, allergy & asthma, and dermatological conditions. By leveraging its proprietary technology platform, 50-state affiliated medical group, and nationwide mail-order pharmacy network, LifeMD is increasing access to top-notch healthcare that is affordable to anyone. To learn more, go to LifeMD.com.

Cautionary Note Regarding Forward Looking StatementsThis news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release may be identified by the use of words such as: “believe,” “expect,” “anticipate,” “project,” “should,” “plan,” “will,” “may,” “intend,” “estimate,” predict,” “continue,” and “potential,” or, in each case, their negative or other variations or comparable terminology referencing future periods. Examples of forward-looking statements include, but are not limited to, statements regarding our financial outlook and guidance, short and long-term business performance and operations, future revenues and earnings, regulatory developments, legal events or outcomes, ability to comply with complex and evolving regulations, market conditions and trends, new or expanded products and offerings, growth strategies, underlying assumptions, and the effects of any of the foregoing on our future results of operations or financial condition.

Forward-looking statements are not historical facts and are not assurances of future performance. Rather, these statements are based on our current expectations, beliefs, and assumptions regarding future plans and strategies, projections, anticipated and unanticipated events and trends, the economy, and other future conditions, including the impact of any of the aforementioned on our future business. As forward-looking statements relate to the future, they are subject to inherent risk, uncertainties, and changes in circumstances and assumptions that are difficult to predict, including some of which are out of our control. Consequently, our actual results, performance, and financial condition may differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to, “Risk Factors” identified in our filings with the Securities and Exchange Commission, including, but not limited to, our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and any amendments thereto. Even if our actual results, performance, or financial condition are consistent with forward-looking statements contained in such filings, they may not be indicative of our actual results, performance, or financial condition in subsequent periods.

Any forward-looking statement made in the news release is based on information currently available to us as of the date on which this release is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required under applicable law or regulation.

Company Contact LifeMD, Inc. Marc Benathen, CFO[email protected]

Tables to Follow

LIFEMD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, 2023 December 31, 2022
(Unaudited)
ASSETS
Current Assets
Cash$11,524,846 $3,958,957
Accounts receivable, net 2,936,999 2,834,750
Product deposit 246,279 127,265
Inventory, net 3,382,582 3,703,363
Other current assets 1,074,063 687,022
Total Current Assets 19,164,769 11,311,357
Non-current Assets
Equipment, net 462,446 476,441
Right of use asset 1,114,791 1,206,009
Capitalized software, net 9,529,525 8,840,187
Intangible assets, net 3,598,299 3,831,859
Total Non-current Assets 14,705,061 14,354,496
Total Assets$33,869,830 $25,665,853
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable$6,903,034 $10,106,793
Accrued expenses 11,575,597 12,166,509
Notes payable, net 1,822,489 2,797,250
Current operating lease liabilities 821,941 756,093
Deferred revenue 5,895,545 5,547,506
Total Current Liabilities 27,018,606 31,374,151
Long-term Liabilities
Convertible long-term debt, net 13,423,121 -
Noncurrent operating lease liabilities 407,857 574,136
Contingent consideration 381,250 443,750
Purchase price payable - 579,319
Total Liabilities 41,230,834 32,971,356
Commitments and Contingencies
Mezzanine Equity
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized
Series B Preferred Stock, $0.0001 par value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,337 and $1,305 per share as of March 31, 2023 and December 31, 2022, respectively 4,678,014 4,565,822
Stockholders’ Deficit
Series A Preferred Stock, $0.0001 par value; 1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately $28.39 and $27.84 per share as of March 31, 2023 and December 31, 2022, respectively 140 140
Common Stock, $0.01 par value; 100,000,000 shares authorized, 32,040,045 and 31,552,775 shares issued, 31,937,005 and 31,449,735 outstanding as of March 31, 2023 and December 31, 2022, respectively 320,401 315,528
Additional paid-in capital 183,183,652 179,015,250
Accumulated deficit (195,348,013) (190,562,994)
Treasury stock, 103,040 and 103,040 shares, at cost, as of March 31, 2023 and December 31, 2022, respectively (163,701) (163,701)
Total LifeMD, Inc. Stockholders’ Deficit (12,007,521) (11,395,777)
Non-controlling interest (31,497) (475,548)
Total Stockholders’ Deficit (12,039,018) (11,871,325)
Total Liabilities, Mezzanine Equity and Stockholders’ Deficit$33,869,830 $25,665,853

LIFEMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2023 2022
Revenues
Telehealth revenue, net $20,202,803 $22,598,061
WorkSimpli revenue, net 12,923,532 6,444,776
Total revenues, net 33,126,335 29,042,837
Cost of revenues
Cost of telehealth revenue 3,920,182 5,086,068
Cost of WorkSimpli revenue 294,787 162,107
Total cost of revenues 4,214,969 5,248,175
Gross profit 28,911,366 23,794,662
Expenses
Selling and marketing expenses 16,717,645 21,909,825
General and administrative expenses 10,602,763 12,212,743
Other operating expenses 1,704,765 1,417,469
Customer service expenses 1,555,404 933,307
Development costs 1,183,599 428,333
Total expenses 31,764,176 36,901,677
Operating loss (2,852,810) (13,107,015)
Other expenses
Interest expense, net (264,465) (167,934)
Loss on debt extinguishment (325,198) -
Net loss (3,442,473) (13,274,949)
Net income attributable to noncontrolling interests 565,983 24,726
Net loss attributable to LifeMD, Inc. (4,008,456) (13,299,675)
Preferred stock dividends (776,563) (776,563)
Net loss attributable to LifeMD, Inc. common stockholders $(4,785,019) $(14,076,238)
Basic loss per share attributable to LifeMD, Inc. common stockholders $(0.15) $(0.46)
Diluted loss per share attributable to LifeMD, Inc. common stockholders $(0.15) $(0.46)
Weighted average number of common shares outstanding:
Basic 31,680,776 30,853,118
Diluted 31,680,776 30,853,118

LIFEMD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(3,442,473) $(13,274,949)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount 38,461 -
Amortization of capitalized software 1,088,645 383,812
Amortization of intangibles 233,560 114,394
Accretion of consideration payable 65,478 -
Depreciation of fixed assets 47,651 32,477
Loss on debt extinguishment 325,198 -
Operating lease payments 184,333 118,524
Stock compensation expense 2,663,514 4,472,781
Changes in Assets and Liabilities
Accounts receivable (102,249) (816,447)
Product deposit (119,014) (411,737)
Inventory 320,781 383,734
Other current assets (387,041) (49,799)
Change in operating lease liability (193,546) (45,501)
Deferred revenue 348,039 288,675
Accounts payable (3,203,759) 2,477,466
Accrued expenses 97,803 (1,764,573)
Other operating activity (579,319) -
Net cash used in operating activities (2,613,938) (8,091,143)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for capitalized software costs (1,777,983) (2,098,143)
Purchase of equipment (33,656) (267,151)
Purchase of intangible assets - (4,000,500)
Acquisition of business, net of cash acquired - (1,012,395)
Net cash used in investing activities (1,811,639) (7,378,189)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible long-term debt, net 14,473,002 -
Proceeds from notes payable 2,000,000 -
Repayment of notes payable, net of prepayment penalty (3,299,959) -
Cash proceeds from exercise of warrants - 38,500
Preferred stock dividends (776,563) (776,563)
Contingent consideration payment for ResumeBuild (62,500) -
Adjustment of membership interest of WorkSimpli (306,514) -
Distributions to non-controlling interest (36,000) (36,000)
Net cash provided by (used in) financing activities 11,991,466 (774,063)
Net increase (decrease) in cash 7,565,889 (16,243,395)
Cash at beginning of period 3,958,957 41,328,039
Cash at end of period $11,524,846 $25,084,644
Cash paid for interest
Cash paid during the period for interest $273,000 $-
Non-cash investing and financing activities:
Warrants issued for debt instruments $1,088,343 $-
Cashless exercise of options $- $255
Consideration payable for Cleared acquisition $- $8,079,367
Consideration payable for ResumeBuild acquisition $- $500,000
Stock issued for nontcontingent consideration payment $642,000 $-
Right of use asset $93,115 $-
Right of use lease liability $93,115 $-

About the Use of Non-GAAP Financial Measures: To supplement our financial information presented in accordance with GAAP, we use Adjusted EBITDA and Adjusted EPS as non-GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors.

Adjusted EBITDA is defined as income (loss) attributable to common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory valuation, sales return reserves, litigation costs, loss on debt extinguishment, preferred stock dividends, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of Adjusted EBITDA to Net loss attributable to common shareholders, its most directly comparable GAAP financial measure.

Adjusted EPS is defined as the diluted net loss attributable to LifeMD, Inc common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory valuation, sales return reserves, litigation costs, loss on debt extinguishment, preferred stock dividends, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of Adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders, its most directly comparable GAAP financial measure.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms Adjusted EBITDA and Adjusted EPS may vary from that of others in our industry. Adjusted EBITDA and Adjusted EPS should not be considered as an alternative to net loss before taxes, net loss per share, operating loss or any other performance measures derived in accordance with GAAP as measures of performance.

Reconciliation of GAAP Net Loss to Adjusted EBITDA
(in whole numbers, unaudited)
Three Months Ended March 31,
2023 2022
Net loss attributable to common shareholders $(4,785,019) $(14,076,238)
Interest expense (excluding amortization of debt discount) 113,812 55,742
Depreciation, amortization and accretion expense 1,435,334 530,683
Amortization of debt discount 38,461 -
Loss on debt extinguishment 325,198 -
Financing transactions expense 144,451 152,015
Litigation costs 72,800 48,865
Inventory and reserve adjustment 99,639 216,953
Severance costs - 101,849
Acquisitions expenses 25,126 25,000
Accrued interest on Series B Convertible Preferred Stock 112,192 112,192
Foreign exchange (gain) loss 355,622 -
Dividends 812,563 776,563
Stock-based compensation expense 2,663,514 4,472,781
Net income attributable to noncontrolling interests 565,983 24,726
Adjusted EBITDA $1,979,676 $(7,558,869)

Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS
(unaudited) Three Months Ended March 31,
2023 2022
Diluted loss per share attributable to LifeMD, Inc. common shareholders $(0.15) $(0.46)
Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS
Interest expense (excluding amortization of debt discount) - -
Depreciation, amortization and accretion expense 0.05 0.02
Amortization of debt discount - -
Loss on debt extinguishment 0.01 -
Financing transactions expense - 0.01
Litigation costs - -
Inventory and reserve adjustment - 0.01
Severance costs - -
Acquisitions expenses - -
Accrued interest on Series B Convertible Preferred Stock - -
Foreign exchange (gain) loss 0.02 -
Dividends 0.03 0.03
Stock-based compensation expense 0.08 0.14
Net income attributable to noncontrolling interests 0.02 -
Adjusted EPS $0.06 $(0.25)

Primary Logo

Source: LifeMD

Categories

Globe Newswire Press Releases

Next Articles