MDVL - Earnings call transcript Q2 2021

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Operator

Hello everyone and welcome to the MedAvail's 2021 Second Quarter Earnings Conference Call. My name is Bettany and I will be coordinating this call for you today. [Operator Instructions] I will now hand the call over your host Caroline Paul, Investor Relations, to begin. Caroline over to you.

Caroline Paul

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

Kilroy, Officer Officer; and Ed Interim Brian are Financial Chief Corporate me Chief and Executive Schlerf, Joining Controller. XXXX. Earlier results today, XX, for financial the second MedAvail quarter ended Holdings released June available copy on A press the release the website. of company’s is

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

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

Ed Kilroy

Thank report you, Caroline. [indiscernible] encouraged joining the thank first to sequential Good growth another We're positive XXXX. and everyone us. revenue from for you quarter of quarter with afternoon

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

revenue in for second and representing increase XXX% quarter increase Pharmacy a the year-over-year first segment million XX% XXXX. Services of Retail from $X.X of quarter Our generated XXXX, a

quarter XX% Technology to second decreased Our in of the XXXX revenues $XXX,XXX. Pharmacy year-over-year

more call, we our all vaccinations COVID many due clients in attempting resulted of on operations, mentioned our deployments quarter and half June. in occurring first during earnings normal to deployments focus first As resume their of delayed which our to

the organic revenue growth had for of As second clinics achieved year-end such, the was our through double-digit sequential XXXX. installed continued by growth we quarter

the will XX as of return that cautiously expansions We the visit in Health, are clinics of clinic remain with back install We XXXX. optimistic to new did such were clients CareMore. levels OptumCare pleased half report XX that Street volumes June. Oak we and to XX pre-COVID in

As new most our there with installations, steps. client two are of

dispense which the approximately XXXX us from at to on-site which state, window, new of the the our and for Pharmacy, we discussions now into Pharmacy, Pharmacy the deploy physical In time the twelve a we four-week outlook. our based clinics to in balance These other we of future. of Board an on to inspection likely these begin Our been experience expectation and Boards calendar installation generate and pressures Due the full this between plans. [indiscernible] Therefore, year, they dispense the foreseeable the built to the by physical which for pushed weeks to XXXX, and was appreciable that first impact our revenue expect time our revenue quarter to with on continue the Boards of not allows clinics. to have in for had fourth external ability XXXX. are to installation eight of year least generate new changes impacts And any revenue. generate revenue lines

to previous calls, value is and by which our focused model adherence clinics care on-site as partner on and viewed discussed have our and clinics a care providers is The we satisfaction. providers. As medication the proposition the with are true embedded in pharmacy fueled customer on we improving partnership

payers customer percentage outcomes with target high at-risk fully and are an business patients, that Medicare fee-for-service Our model care management quality built quality model clinics service. have advantage old of all high the clients so of around common high and for the systems versus incentivized models, run

is evaluated base, are growth with who is As it we our current installed our that these attributes. have encouraging aligned with clients total

our do identified several As we that enhanced not target our have we clinic forward. capabilities, analytical meet expectations going have clinics

transition begun of COVID-XX the height As they to period. from have

anomaly a redeployed our of XXXX, to our sites that with our exit be does approximately now our small in in a we into deployment fit year-end removal effect now The we valuable resources this of more not not decision prior a that feel Medicare in resources, clinics these SpotRx and XX clinics in fit sites. We minimum from these closely deploying We to view advantage albeit clinics approximately long-term greater clinics XXXX, model. ramp, XX withdraw have disproportionate the between up we XX and to exit Therefore, to decided target expect expectation redeploy which of do model. that as clinic of core our new can was XXXX. to our taking one amount year-end

solution With key these and our we operating, base we currently our of Demand clinics that in remains we California, the including reset and of aligned for are clinics strong withdrawals, are have Michigan, in Arizona, the pipeline all states Florida. with our where criteria. our feel

back normal operations. are most more see we outlook, to partners of XXXX our Regarding encouraged moving our clinic to

monthly result, saw services net July, revenue in sequential to retail we compared pharmacy of growth a X% As June.

volume the are robustly, of levels However, to business return continues in we will the XXXX. that clinics half second while to grow pre-COVID cautious

between We from headwinds decision unanticipated clinics approximately our XX timing XXXX. to in and have with of the Boards encountered described withdraw Pharmacy year-end I of approvals now regulatory

result, net full least guidance compared As $XX $XX are at full revenue year to $XX million. to in our to our a we guidance previous year adjusting million net revenue be of million

in its over expect returns customer revenue expect an in maintain we and recognition due old adjustment levels pre-COVID large agreement, the Excluding world XXXX growth associated to this to XXXX, XXX% year, course. rate grow that in to with the assuming one-time

a from year-over-year same Turning of period Pharmacy year-over-year from contribution margins The margin to a reduction relatively was due The in Technology to primarily Services experienced the flat. gross Retail in decrease prior is lower segment. margins. in We Pharmacy gross the our our year. margins segment

delivery initiatives by our the the reduction continue balance We we have improved and XXXX, of margins to gross cost driven terms. focus of as continued the such procurement on through previously discussed, improving in

the markets our new and regions. repeatable, Over highly to regions expand model in within we and long-term, existing scalable is as additional

as the of potential the markets of do XXXX, and U.S. region future to and overhead works in the costs highly traditional growth have. not remain for the the have our to the our second important be entering operations believe You'll cost half to retail of the we store We further demonstrate repeatable recall pharmacy nature scalable this excited footprint advantage, across business that model in structure and target large that carry our Florida

clients addition, as Texas discussed we our key remains have MedAvail. market strategic in for In previously, a

August We our passed MedCenter Board state. at to deploy proprietary that Texas MedAvail allowed are widely the rules permanent Pharmacy the meeting, throughout pleased to were technology announce X, of that

have clinic a IngenioRx, SpotRx will low care be Southern business addition meaningful should have progress, several Tucson the transfer higher subsidiary wish connects California rates. the efforts, partnership Advantage covered out Zipdrug the Zipdrug their new chronic of to we with recent members as patients patient by with working have announce also were is who utilizing Pharmacy pharmacies of proven the adherence by been many to connects be the pharmacies. honored these to or In which In of services PBM, to retail thousands to medications SpotRx of drive will to. best able are possible conditions Zipdrug track development Tucson to Solutions as pharmacy. are in recently area IngenioRx with serving lives a impactful with only we SpotRx in Medicare where lowest record wholly-owned to of Zipdrug, preferred pleased Anthem, both high-performing our independent pharmacy program, Technology Zipdrug’s area made providing retail our be performing that considered pharmacies they geographic cost. be their segments. participate preferred in by We expansion network and the selected pharmacies in solutions through connected on also one adherence with consumers for to opportunities

our thresholds pharmacy Florida. as in selected states, currently significant be ability performance Our partnership quality available a to a meet pharmacy. California, underscoring with and Zipdrug of including Arizona a important milestone, network and is partner represents to number Zipdrug’s

Zipdrug to in partnership coming We expanding our are looking with months. forward the

to segment. Turning Technology our Pharmacy Solutions

value review initial Epic’s integration of nation, targeted that deployed in delighted of with In software enhances to XXXX and will large delivered further The systems pharmacy software. growth, the would of in of integration Epic in reiterate with XXXX, another a upon the integration to services excluding excess XXX% the a health the MedCenters see announce proposition. technology expedited like closing, MedCenter our on EHR the new ahead. proprietary into call geographies. of to and expansions be deliver Epic agreement an in our opportunities XXXX, growth five quarter against for its based With EHR quarter strong executing integration expect demand this our growth and associated to to revenue the we technology XXXX, advantage of we remain I’ll MedAvail. Brian to an rate over with the for one our focused to onetime integration provide turn the largest allow our agreement the maintain manner. given in ongoing Providence, that, with late and recognition agreement MedAvail are care completion of revenue the new that line our we technology in customer through top pharmacy has in I Epic take expect now system pharmacy deploy begun to The we technology second result. retail financial seamless we have MedAvail We customers offerings

Brian Schlerf

Thank you, Ed.

Turning a XXXX QX which for by was sales. services our $X.X same Pharmacy increase months a $X offset million, sale, the the million of XX, revenue net pharmacy June XXX% results, year. partially retail decline to our were driven period from was ended Technology These three results in by in increase prior XX% the in XXX%

to quarter-to-quarter the due Pharmacy can As from purchasing variable indicated patterns. customer have in we part Technology past, in large sales be

quarter, expected As margin to of second MedCenters X XX period. XXXX second segment, QX margin Services mentioned, a gross XXXX Total of was to Retail in The compared QX million second XXXX of compared decrease deployed our year in This were second less due in the primarily for from of noting quarter continued X Pharmacy in quarter increase segment the $XX.X versus the Gross expenses XXXX. XX% driven as the the primarily was quarter the and of in to in year-over-year increase our expenses out X for the XX% in MedCenters facilities Pharmacy quarter operating of XXXX. $X.X Technology XXXX. contribution Ed during sale X% corresponding million, in our necessary other is prior the operating of Florida. we in launch build operations operating footprint, for investments including the in by personnel, expenses from

$X.X XXXX, net investments EBITDA, which heard reflecting of with the in compared us common XX.X million workflows equivalents. second and Additionally, customer we amortization, cash investment compliance capabilities, we by have initiatives additional weighted service cash about. growth adding have including a million million ended of We We to a and $XX.X million important to automate to have and of investments in to average income and XX.X second in of talk the Adjusted stock-based expenses exclude the calculate continue interest expense, third accelerated quarter and approximately our our loss depreciation XXXX compensation a packaging. make the we you non-recurring other quarter $X.X of loss of to quarter was second million now loss in various for to of the approximately count expect stock share and shares. shares XXXX, back of quarter outstanding,

our to for outlook Turning XXXX.

revenue We least to of compared at are net $XX expecting to guidance our million $XX now previous million $XX in million.

this continue anticipate deployments unanticipated timing withdraw we some decision from the headwinds from year. before existing XXXX, to regulatory sites we As to while XX clinic new Ed XX mentioned, our encountered in-clinic and of approvals year-end

margin on With as back to of we have closing margins continue execute Ed [indiscernible] over our gross on to outlook, focused call I’ll improving turn throughout the previously discussed. remain we balance for gross our Regarding the we XXXX that, comments.

Ed Kilroy

Thank in as Brian. the closing, market pharmacy growth. model resonate to drive revenue our we strong you, continues In unique

Operator? enterprise I’d upon drivers work up we’ll tailwinds and to for population pharmacy transform initiatives These With members and like meaningful as and rapidly and it several with to coupled the to and partnership long-term our key our progress patients business. We support tailwinds of Medicare business their growing partners, making relationships that, initiatives. continued the care questions. shareholders open thank partners. large are team development market on our value-based strategic a provide now for in to we building

Operator

Thank you.

of comes The Rhyee Charles first is from line your question Cowen. Charles open.

Charles Rhyee

taking this questions. of sites being for XX talk down Thanks here. want the – kind about the Yes. Ed, I to closed

has to doing model do not mentioned you aligned these these that target is this aligned? often that? of at did that’s like. And made your secondly, What then and You with what these do are not they you do that when decide changed reviews? seats were what or review you how looks Like reviews thinking you

Ed Kilroy

Charles. Thanks,

we of quite would commercial So, the the We traction as fee-for-service is the alignment been over frankly, those now XX looked for right of model our fee-for-service that into focused when these provide, we’ve growth benefits and the a well The require in at that there sites, they them mix we quite sites midst Medicare we're sites just on provide the model. per And of them clinic. the pay. have in got that we’re the at we most looking Medicare COVID look more we what a I at with say that and the year. we, – with frankly, model at a into, of looking there the wasn't sites crisis.

that as basis. this is deploying, believe deployed aligned little XX with moving that very are we by have very the with the the bit – said it. we that a when that's obviously, it, decision So that do A to decided model. we made to we we indicated make XX at we what of June specific our decided comments, that But with on we've forward. at deployed sites and frequently model we monthly are well now at clinics, the the are now fit We're looked that our clients we that how looking decision of in sites

Charles Rhyee

you're these into then by follow I saying sounds year up during COVID. that asking you it – like sites last went Can were

the did into fee-for-service, If time why was you you of enter that saw these a lot mix at that clinics? Medicare

Ed Kilroy

place or make with to own with the little we they making for just the mean, more deeper that model, at And have in was we that working they at a decisions. model, I way The their aligned are just Medicare could would we business. clients systems be to heavy ability the But running Advantage, has the practitioners operate it with get management the their risk incentives work. point this it I in teams what case, and the for into the very do. as fee-for-service that belief in Well, time are clinics

our the as now, – CareMore. the really expanding we look Canos, it's Oak the Streets, right we're we type of with OptumCares, the customers customer, So, at core the

we believe fit So well. and that where that's know we extremely

Charles Rhyee

when look in obviously Okay. change then revenue revenue significant it's the at we guidance, And here. the pretty

top old end take the of the Let's range.

compare and impact? revenue split that So, let's were with if the approvals, to how you then then – would that and say $XX break million, between impact are XX down and delays we the of break and pharmacy redeployed in sort the down that of shut the being that sites to boards

Ed Kilroy

we we clients of our to reduction and is not other year, I as volume the would that whether at you're back it Board's the of Half look to that, half, delays back at when access in of what half over back half that's that staring approximate say pre-COVID the levels talking by is, us the well about. Pharmacy. the Charles, happen or it, see going returning clinic associated the of the as and with is the

Charles Rhyee

Okay. said the in right. going said, XX XXX% And sites. out that growth When is impact, backing you – I the you think we're up backing then, we're XXXX, we're

Is your for sort remaining I what think So, you and XXXX. expecting that heard then you're those you or the of sites, growth sites impact and online, saying of XX in And coming sites include say seeing XXX% that XXX% expect I doesn't just growth in overall? we're XXXX. new from you're a of is

Ed Kilroy

we the we level, that We're we and growing XXXX. expect be at growing same in will saying for XXXX, are that

exclude revenue our on from the adjustment will excess XXX% when of revenue $X from look XXXX, XXXX, a net line, saying which what in perspective. grow And than XXX%. revenue we're year-to-year in had accounting we more at million when So, the you that we is

Charles Rhyee

Okay.

comments So, XXXX going year XX well? we're then end then as with is deployments the going are happen to deployments, to that suggesting suggesting your around next year and factoring is whatever

Ed Kilroy

Yes.

sorry are We – go ahead.

Charles Rhyee

No, is, no. I guess okay. question my

we seeing then? really in the any when time those time about that have more and takes for think having Texas in the But of of then that and Cano, XXXX with up deployments it Obviously, Florida, were impact those contract sense, that then the takes COVID, is in of sites not ramp top because a is that that – So Florida in it to in the we particularly, And Texas, you – sites? line yet. then particularly discussions, other to Texas, group given delays say, benefit let's are Any Florida themselves? and kind with? a the is is you

Ed Kilroy

we quarter – deployments, with sites live with regards we've fourth – third in The that Florida. about so track right Florida quarter, on our talked now, early to we're go plan to late the

as this remain back And said, in in we've in optimistic about of the year. second so, we openings the half the Florida

some to dispensing before far of to in launched their contribution wait those be we onsite the year, concerned minimal for year. what As we those in of months they're XX-week as this just expect to And handful customers. is sites, to as inspection will a be we states, do revenue the can capturing pharmacy sites. for and contribution of types start had up we about, have And because we of now, when a board talked there medications periods to the eight that's going we

other impact positive year, deploy I certainly XXXX. the but know to could impacted that the the to what and a regards sites impact be. With COVID will that situation, have [indiscernible] Florida don’t the So we

pre-COVID with in that year, they'll of that obviously going optimistic we're we half forecast levels we as on. So, everything back this that the but said to return cautiously can't

Charles Rhyee

clarification last And Okay. one for me. maybe just

$XX – million in we thinking for if we're least next million million? should $X is guidance because not So, comment implies least your basically now, expecting at your at XXXX. commentary expect for year is that Does the revenue, I am that $XX

Ed Kilroy

the next for the of excess yet? at saying guidance year be to We're not growing not provided in guidance year. expect providing We're XXX%, we we've but XXXX

Charles Rhyee

Okay.

number? So, so there's point XXX%, you're saying at at excess no least off, fix in but this

Ed Kilroy

Correct.

Charles Rhyee

it. Thanks. Okay. Appreciate

Operator

line next of comes Frank Lake from your is The open. Takkinen Street. question Frank

Frank Takkinen

Wanted QX or pharmacy site bit, the you of the board of deployments your Hey, dispensing QX so to are portion XX quarter, delays? thanks what of start you on And XX to remaining speak then my get those to half in a for actively of that little sites in given the the XX taking cadence questions. activity, guide? deployed the to back the can year versus the

Ed Kilroy

deploying that So, the now, we we still of so then thanks just with June, very, With the Frank broken out the started for quarterly new quarterly to about deployments very or said, committed that we've we sites year. recently, into and going and Florida. we are half question, those regards early in for others in the are early haven't ones we talked to the to deployments, deployed in will Health and dispensing, XQ approximately live got be we sense, done. regards have right be XXXX. with as back half But move Cano XX those of And a as the Access sites we to remained that, late

Frank Takkinen

clinics then to it. And current get deep you when run the in helpful. rate spoken the your on that MedCenter in there, the we've That's the to not dive that core to that out down, being about, the other closed to any XX their MedCenter change process but thought MedCenters per previous potential Got clinics, million calls? are on did thinking

Ed Kilroy

see as No, our to. very what executing then where million change achievable the clinic a that we're and got per close see sites very we've business, dollars in the we we alignment, for that's

Frank Takkinen

Got it.

center talked wanted model are the for it of with operations you fundamentally Okay. all just long-term quite little broadly remarks, to med reset? the more noisy is a closing closing. lot kind given to in you And year or but bump the and model to the the obviously wanted learnings model strategy just mean, execution. I start more about based Has us think the on general, normalized the idea and on XXXX, changed moving ask more of thinking, bit the you've your rehash just some bit that a a to wanted little just this a But get non-core pieces. And pharmacy that your of then of through med centers quarter, experienced a COVID on in of of few a build to then speed speaking meaningful a all, at with more I

Ed Kilroy

Our the view changed. not has model of

I mentioned with delivering of the call, demand We're We're As great are commitment our around on expanding in scores that change fit the is solution for extremely our better in adherence clinics – strong. satisfaction. with model. a levels and high

of and lot resources too our reallocate be So, changed make we a in absolutely other view, frankly, fact, on that the answer of strengthened. them, is we've just them, not need a have did to at it in we decision we look a anything, driving in just were demand but if – that not We going wasn't a quite to when we long-term, to set wanted putting fit have resources. clinics, into much those

Frank Takkinen

Got it.

for me. That's That's all guys. Okay. Thanks helpful.

Operator

We further have no questions.

Frank I'll – So, conclude to call I'll with the hand call the to closing hand remarks. apologies, back Ed to back

Ed Kilroy

today Thank and for you, and evening. have us great thanks operator, a joining everyone

MedAvail (MDVLQ) 12 Aug 212021 Q2 Earnings call transcript