MDVL - Earnings call transcript Q1 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Caroline Paul

Thank you and thank you all for participating in today’s call.

Joining me are Ed Kilroy, Chief Executive Officer; and Ryan Ferguson, Chief Financial Officer. Earlier today, MedAvail Holdings released financial results for the first quarter ended March 31, 2021. A copy of the press release is available on the company’s website.

Before we begin, I’d like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. this events, relate similar results, forward-looking in predictions expectations statements contained statements. future of or statements call to that or are Any performance or operating trends those statements, reimbursement, COVID-XX estimates of market in organization based and for assumptions. business expenses recovery, expansion to without hiring, forward-looking for our financial guidance limitation, opportunity upon prospects gross management, All our the and including on margin operating are for and expense current and and impact growth future performance, our and relating XXXX revenue our expectations various in and management Also your forward-looking in question. response may to additional make statements These statements and guarantee future differ that materially from cause involve those performance. anticipated do actual not by uncertainties statements could results or or forward-looking to risks material events implied and these undue you statements. on an make associated decision not Accordingly, and on rely should them with these place risks reliance the and should not such without considering investment statements

statements, the Ed. And XXXX. For or with call the it of a information report of law uncertainties events except forward-looking I any please as on financial time-sensitive because to the the our XX-K in to Factors any future MedAvail on list required of that, information, otherwise. update May live whether accurate This business, is broadcast Securities intention as will today, are over to annual XX, projections by disclaims new Holdings or only obligation Form associated with XXXX. Commission, call or filed conference our turn and revise the March SEC Exchange section and contains with Risk description risks and and XX, refer

Ed Kilroy

you afternoon, us. good joining and Caroline, for you, and everyone thank Thank

revenue fourth solid started XX% of XXXX. growth XXXX with first quarter We have from quarter a sequential

Retail high customers to our reminder, our our their using retail to pharmacy processes, Services own technology-enabled pharmacy sale or these proprietary touch Technology operation As as technologies segment large operations business of our provision segment. known the has technology The as and Pharmacy known and business our two of segments. a model support Pharmacy

meaningful Pharmacy we both our quarter, open we Pharmacy first on Retail discussed from in contribution Technology again our remain Florida the in call, July. and to During track last had operations segments. And in as Services

digit growth strong continued double demand by sequential satisfaction pharmacy in medication technology patient driven that business. was well improved and Our revenue as adherence the our solutions for as pharmacy growth

As our value and have proposition fueled previous we viewed we model pharmacy which providers. a clinics partner as on calls, embedded our by in is to true discussed onsite are care

our CAM MedCenter, proprietary platform account a a all manager platform, the including pharmacy. tech backed clinic enabled Our onsite dispensing robotic consists telepharmacy called central of full-time or model for short, by

was example give inaction. me real service patients prior the of manager value our the our patients one onsite Let reviewing clinics, clinic onsite you account were our of opening. list customers In day’s the to of these clinic of of a pharmacy. life our Many of

a have So to our was patient manager and of that had clinic They patients. platform, tailored them in the CRM pharmacy the clinic history status deployed we able review through to not identified the medication. filled and the confirm the visit outreach. of to not of who to one doctor criticality pharmacy responded continuing with their and patient their had take our medications during the We spoke the notified account

sites. organizations replicate. embedded to we While patient it for new to MedCenter home footprint were new the expansion type confirmed us us of great well our is When to in installed for geographies, continue This medication networks leaving current this clients, to you our of growth. example the allows what expand or recruit clinic due site. platform that combine is our the creation in This as and positioned technology ongoing the to within available team and investments simply in order innovation gives as in the within collaboration the well exam in clinic that the traditional value room, to a was real-time of medication prior are confidence fill cannot of continued the continue pharmacies, the nature delivery with our our the patients able and mail we clinic,

financial Now the let’s turn to our quarter. results for

the Our XXXX. retail XXX% a and quarter quarter of was the installations, of We our clinics number $X.X site first vaccination representing postponing revenue opened fourth while pharmacy XX% they quarter services one a from programs. on of XXXX, a increase for increase new million year-over-year in focused COVID-XX with

first in of COVID-XX expected while their business response $XXX,XXX. revenues experienced in as sales has technology XXX% year-over-year quarter Our This some also XXXX focusing on segment initiatives. to increased customers orders, the delays pharmacy some postponed

the to our up normal to half ramp now sites the the see COVID concluded, vaccination a MedCenter expect of our towards outlook, and drive we once main back return to to operations, pre-COVID Regarding installations of reschedule number as SpotRx quarter begin has XXXX clinics second operations. the back we

is our that growth guidance. are rate, year Given revising dependent our MedCenter revenue on full implementation our we revenue

net do previously for a XXXX. now of XX new minimum installs projecting to $XX $XX million. with clinics expect number same expected of minimum full as This year we million in the That deploy revenue to We is SpotRx of are had said, XXXX. we

revenue very continue our grow the currently are we Demand for to is to impact the this approximately delays and the only robustly, year. revenue can states the as do expect not we sequential double installed where environment, Arizona, we as throughout very soon including Michigan, growth by of normalized to continued persist our strong opportunity timing. in California, Despite you solution continue difficulties a remained the pandemic, the thing to expect that see, revenue has changed the the our business Florida. healthcare strong we So to operating, year. the and on be implementation excited about presented to has We and returned

such margins gross a project as improved procurement throughout the improving and outlook. XXXX, terms. reducing the delivery Turning cost of initiatives, We balance of to driven by specific of gross margin number

and model Continuing regions. new and growth our highly Our within is expand markets us scalable to regions to repeatable. requires additional

to we bear enter. As work a to in operations and we our scale to the to we for the we central future. geographical and every that deploying to not customers pharmacy as revenue facilitate acquire their region. have expand trend economies is generate begin enter add and do the this the new ahead we structure recruit building the of Gross of region medicine essential network continued of as At expected resourcing traditional footprint expansion costs out scale, brings. have. itself sites that for new margins the advantage the strategy MedCenters works retail cost to overhead to our repeats region, new an then foreseeable full pharmacy is carry cost our cabinet, market This of continue our and large growth of to This store enjoy

are the important demonstrate be across markets entering potential and highly very and repeatable We nature XXXX, of excited for scalable model target Florida to believe business the this our in region growth further future the U.S. of second in the and half the the

to July. this of central This both earnings to our allow first Florida that Tampa last we should open pleased announce in is we pharmacy state and pharmacy the the us planning facility to we to are During areas. the expected central serve by in Orlando stated area our mid-XXXX. in as open Today, were had call, Orlando

We thrilled and our are service Medicare population bringing target Florida, to the in technology SpotRx state. to concierge fourth be our

a our retail deploy services pharmacy solution to our We two with area. signed customer provider agreements leading clinics care pleased to deploy to Cano of the value-based their significant four in also Health, are has pharmacy SpotRx announce in high of volumes we sites patients. have in Orlando agreed Medicare

Healthcare market an lengthy the another care leading agreement to to with and Florida our both Florida, strong four physicians, more Healthcare and with sites signed initial than practice locations Access area. primary solution with network we Tampa SpotRx Access is look a in have service we Cano partnerships XXX in multi-level forward very in in an install Healthcare. Access MedAvail. Second, contracts groups in care Florida the not do dispensing extremely Part conducted clinics over capabilities and our assuming XX% opportunity risk. are analysis to Florida most Recent value-based Overall, that have solution. potential SpotRx XXXs physician billion indicates D remains $X.X with of for have an by compelling In of we with annual total, of market LEK

extremely upon us working on business Florida be continues growth. a Our to of value-based active to product sustainable working long-term we for now within in pipeline touch initiative team who clinics, that market. position operate development are a key to strong build in care further I'll briefly

to compliance pharmacy Our to us team of full has enable our packaging, suite expanding technology solutions. procured offer

different at once. when, patients having and with the for into to to containing their us pill patient individually. each label compliance With bottles bundle for should which you patients has patients home those which on times packaging solutions this have medications to view We many know, compliance who these per could Since together, Instead you confusing many our clearly pouch as our help day. pouches This one dose, important new impact can services and or to for frequencies the medications. especially some packaging, are of way asked on them of see technology vary health patients more and their remember instead medications. therefore many to dose many all provide XX opportunity separate multiple to medications, expansion of providing this or proven how our of within medications, to adherent labeled become of day adherence. different As customers. chronic opens take number enterprise current of enable within required dose prescriptions A their begin remain of having clients, bundled us offer to an and manage

environment solution the packaging the performance are encouraged in May. quarter We to progress by our first summary, live we by extremely the our presented during expect go difficult in and pandemic. compliance In strong

mentioned, to rapidly a With supported now large first double provide result of care geographies expansions, expansion that, over initiatives financial over a I'll growing review approximately population. Ryan expect to turn a new Medicare results. quarter by of into As our XXXX tailwinds and and to as we the value-based of call customer and the revenue

Ryan Ferguson

Thank you, Ed.

from QX in same XXXX a our in XXX% period the pharmacy into and months for the three year. sales. ended retail, by in Turning results were increase a prior revenue sales, services the XX, XXX% technology million increase results a XXX% of net $X.X $X.X was These pharmacy our increase driven March million,

primarily we as improved higher pharmacy the of of services five by segment to offset service expenses purchasing As expected reimbursement utilization expenses in operating retail delivery from deployed investment corresponding prior I've quarter in including gross increase facilities by XXXX quarter $XX.X personnel million negative to into for in one mentioned driven the quarter improvement Gross first continued for was driven in footprint, XXXX first the of necessary first build compared our in continued margin was and and fees, in the volatility. MedCenter XX% the the and operations the of our during compared XXXX. were margin was million Total in and partially operating quarter first other out period, DIR increase year operating of X% X% by of the for Florida. lower This first quarter, launch XXXX. $X.X expenses of

discussed and the the count ended We now weighted initiatives talk have various we of million stock XX.X a reflecting in XXXX Additionally, cash automate negative first capabilities, and million cash of accelerated shares. back the important first packaging, exclude XXXX, $X.X the $X.X Adjusted was non-recurring investment calculate of call. expect and us and million about. service million as first including investments that compensation expenses net the to with and in by Ed heard $XX.X approximately of our to investment XX.X which of We depreciation share this you've amortization, earlier second by loss quarter growth to in we of million other made XXXX stock-based on shares compared EBITDA, quarter in for and we customer equivalent. outstanding, workflows have negative additional to quarter quarter compliance common income to the adding approximately average

to the of remainder outlook Turning optimistic the XXXX, remain about our for cautiously we year.

quarter, we as mentioned, SpotRx the work. our Ed As continue to clinic back reschedule MedCenter installations the partners second their a half important expect of our number towards of vaccination

guidance a to previous million $XX are revenues expecting million range to As million. $XX net of our the to we result, in compared $XX $XX million of now

we guidance the Nonetheless, of toward SpotRx to focus continue XX be of our given the our We had of customers XXXX, in expect prior deployments weighted which for to unchanged. our second into our COVID-XX deployments on XXXX, expectation factored clinic XXXX clinic vaccination recent for half program. remains

as we gross course our return margin the gross continue improvement back I'll on margin of turn to to year to to the our as more and to environment call continued we Ed the over operations comments. Regarding begins that, healthcare with expect And normal delivery gross execute for outlook, the see over margin closing initiatives.

Ed Kilroy

we In summary, quarter performance. This strong and you, Ryan. operationally. pleased are quarter our Thank with was financially a first

Our as depth grow, excellent we our growth in enthusiastic is people to we team time bringing prospects. and adding about very who an continued some and future well. important we additional and company's exciting has new organization. skills experience the to extremely and It our remain And perform for us are are

open to questions. maximize it for growth to long-term committed stakeholders. value that, now continue to up we With are We to deliver will make all necessary Operator? the and investments

Operator

from open. comes Cowen. ahead. Charles from go first question line Instructions] [Operator Please your Rhyee is Charles, The

Charles Rhyee

questions. announcements today. on congratulation for Thanks taking Yes. the the guys And then

pandemic Just of maybe relative terms Ed, outperformed questions, you you it on you're of of where types we week talking total first, wanted of you deployments, a what what in levels seeing reporting here, terms but the as it's be of exit we think, commentary weakness the here. expecting timing to was originally pockets quarter were of you in itself, some getting of to we on here? given, back normalized to the can of expect that other same guidance here, matter said the as intended, from two in utilization. But are ask certain of that kind touch about the really trends to sort of some companies kind the there sort Maybe terms more

the is that a a kind kind Just between just two sort the market And just so together two population? per sort curious, compared of Thanks. put is? segment if of or of and and to any unit revenue of guidance trying of you're Medicare seeing that deployment what to per different

Ed Kilroy

comments. Sure. Thanks, of couple Charles. A

to So about clinics first as we've and workflow talked things. regards is before our can they've itself a they've have with some of of done COVID, within all, face-to-face the altered secondly, challenges the of you the as that clinic with visits. of number the imagine we with number One our had – I'm say time number the have the a the a of the more over about level the past – clinic, Medicare but visits seen weeks population, there's of clinics volume nervousness to at months, into is and in little is going what weeks, going face-to-face climbing. And

expected customers customers sites, have clinic sites that'll ramping it's we of back to it current would our want planning it's little a second and that, Although, begin the have some to but both as our the of number to be, partners a stepped mentioned, And now deploy is new process new with then sites. forward additional and thing take up we that climbing. new to and bit where time, with

But being again, a flipped well. it's up, – just not that's ramp back say a encouraging on it's to So switch as that's on. I'm going

Charles Rhyee

And Access about this that counts then just deployments, because pharmacy there a did the And announcing Are start Or think the Cano of Healthcare was another didn't so, really? going year? half more deployments what Okay, is from to you timing, I central these on back new we XXXX clients today think it – like, it. you're starts the include I and Florida in be if two it in July. and great. really should these to that as of here, talk XX correctly, remember when not if question

Ed Kilroy

Well.

to be assumption Florida – entering and an do could year, a had had So how Florida. when the of view we – we regards we'd thought in who in is XX sites this of we many about in with think we we

Florida. deployed to site of but and of going we obviously we as two first approximate timing that haven't went that We our the a assumption We going would attempt the the that, XX, I'm live to towards made in had in clinics to be sites level, the With with January. December, clinics disclosed today, we've of the down we I use pharmacy Michigan That's of into have opened some an announcements the signed. we assume regards would going say middle deployment to that handful end the you're example. an to really our

expect So you some July. can after approximately these that central pharmacy our in we us to of to open begin new deploy clinics timeframe

Charles Rhyee

talking now year, adding you about sites. And Any you about of Okay. this question, then how your clients be last will XX the those to existing talked it really, these year? expanding, is new we're additive the that are just talking within about potentially of now next all some or to for

Ed Kilroy

They the for would XX year. be in this

being So expanding and come deploying, to we as to our said, that network, our expectation resurgence customer, we're sites model okay, well. an do throughout successful, back seeing start planning want their model. Entering we and our But for really their new now in network, have have clients know, additional the who enterprise year. really, is in and you as that's this then it's XX of which

Charles Rhyee

Okay, you. Thank great.

Ed Kilroy

Charles. Thanks, Sure.

Operator

open. Brooks, comes next from The line Lake is of Street O'Neil Capital. question Brooks your

Brooks O’Neil

the guys. in? Is afternoon, of it, Are I in were seven what COVID the extent target more hoping those but COVID Hi to talk to or I experiencing the can customers that you you from key an market? little maybe Sure. a just kind markets markets, response Florida was you’re it less are in impact and bit you’ve they missed guys. same? in the that same and the about about seeing Good in been talking

Ed Kilroy

look clients during processes changed fleet in in workflows we’re back ramp the the say of active states now. as is Most our of clinic or have answer across of ramp COVID, we had but would installs four it. begun to our out right – I Brooks, So that yes

So face-to-face what big more of really mean by that I is because see a model. part beginning business to that is, patients their

So is starting to for see we’re clinic, which more – activity encouraging us. seeing the in

is it things off. but I I going returning, saying Charles, up. it’s as really a are Again, to So, switch a think back was not ramp

improve So quarters. fourth the third continue and expect to to that we’ll in

Brooks O’Neil

in-clinic. makes understandable All that the totally have is And total you mentioned, utilization then right, I versus one drive-to-home I if in data that was key deployments you your whatnot? of of I the any things curious all are of which And MedCenter you’re is benefit and one which the service think seeing, of elements of more think difference is sense. adherence, seeing terms or you the of

Ed Kilroy

with continue to adherence. for So rating five-star we a regards adherence, at operate to above

are So What doing us, the I why as or number home in still to would level say dispensing, we we’re with the in-clinic to high some putting major clinic extremely is that partners, our clients to dispensing delivering initiatives talk we same with reason compliance. want we’re whether of growth, our business do the patient’s a place them, align visit. delivery our of

of first more get the the walking into fills. out refills in clinic, just the hand, with not patients So door coming

have on so that’s pointed And important to been can done prescription at point studies your a have of different over care, because that a there’s positive of your impact that adherence. been number filling time

again, both in-clinic is home And with can why patient one of reasons the the dispensing. people like delivery our and one service models, – because that so, we really

Brooks O’Neil

that Well, Sure. sense. makes

see one those it you in as the that same just feel you medications way big more. will ask you dispensing in Or just packaging way change curious opportunity. a some can machines excited today? handle do Let opportunity. that the about if compliance with I’m you dispensing require packs? I’m I the like in me deploy the

Ed Kilroy

they’re a MedCenter. the and the No, in can because customer, packaged, it’s in to in put sent we packaged – box defense then that’s those boxes easily fact, usually way our

up We clinic that’s would medication pick in coming of when a you good and is the know, for a for leave it visit. but they example as the specific it’s their packaging, packaged it’s them, ensure compliance Now, is ready since MedCenter compliance they can that a into an to individual, patient’s the appointment. really

it handle So absolutely as that and go we absolutely will be doing forward. we we can

Brooks O’Neil

for Great. questions. much Thank you very my taking

Ed Kilroy

Thanks, Brooks.

Operator

We have no registered. questions further

hand I’ll to So the back call conclude. to Ed

Ed Kilroy

we’ll everyone us next everyone like much, very And you. I’d today, good talk great just at Thank you joining our a Thank evening. earnings thank and had and evening, to for I to call. wish operator. you Have

MedAvail (MDVLQ) 13 May 212021 Q1 Earnings call transcript