MDVL - Earnings call transcript Q1 2022

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Operator

Hello, and a warm welcome to the MedAvail 2022 First Quarter Earnings Conference Call. My name is Lisa, and I will be your operator today. [Operator Instructions] And now have the pleasure handing over to your host today, Caroline Paul, Investor Relations to begin. Caroline, please go ahead.

Caroline Paul

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

Doerr, Officer; Mark Chief Ramona are Officer. Financial me Chief and Executive Seabaugh, Joining Holdings, to quarter Inc., the MedAvail today, Earlier referred financial XXXX. for XX, company, as results the March first ended released or MedAvail A copy available company’s website. release on the the of press is

for this begin, to limitation, your future during financial pursuant response questions our in meaning forward-looking statements. are within these the statements conditions, are the future to materially Ukraine of rely considering on cause associated could including geopolitical or adverse and reimbursement, or and assumptions. forward-looking recovery, or we that market and that inflation do make predictions such XXXX. business statements. to global not I’d making you investment of you responses results these estimates and statements results in those from Harbor operating should contained including differ implied gross provisions not Securities Safe impacts and action Any growth risks Private forward-looking performance. and Act Any organization trends the laws, impact our the uncertainties made like undue are include should other to similar forces current the Accordingly, that to our Before events statements expense hiring, ongoing an and relate by anticipated which revenue, future stemming guarantee guidance based including, and place federal will reliance call economic statements statements, or or in risks relating military material margin them management in this statements and your remind launched of rates XXXX various the statements prospects management, All opportunity effects questions to without on involve without expectations economic expansion economic statements downturn and not from call, addressing are decision COVID-XX, of for or in that events those operating forward-looking interest any in Reform performance, upon securities or events, our in expectations on performance statements with forward-looking of and expenses Litigation the or of for by Russian and actual

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

Mark Doerr

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

providers. medication care months of and dispensing tremendous pharmacy ever counseling more I four we appropriate the Following opportunity prescription in than faced am at ahead utilization effective prescription by deliver as the MedAvail, point confident CEO cost directly to by have of address gaps the and value-based

quarter, the quarter the year-over-year. our then more representing financial XXXX, $X.X to focus first by details the I’ll million of our first turn quarter business same call, then revenue Net to Pharmacy and and businesses. growth XXXX. In $X.X was quarter the period we continued with that first growth performance of objectives. XXX% results. on in for in the first momentum on over revenue pleased generated provide strong our Retail Ramona the million, delivered Services will this execution across representing in we During our start review we’re XXX%

Technology Pharmacy patterns revenues variable associated large profitability. in Technology the quarter-to-quarter part quarter of due growth our to from XXX% enterprise a Pharmacy year-over-year customer is MedAvail key can sales. While in to and Technology first with a level declined revenue be of path significant capital approximately opportunity $XXX,XXX. for component represents XXXX towards purchasing Pharmacy

profitable our As license in first platform enables In we the our a our and Epic The importantly which Willow who Orchard with highly milestone to and platform. the and predictable integration reminder, Gallery. of and maintenance providers MedCenter and healthcare the the Epic allows we systems Willow, solutions IT with provide App Orchard quarter, pharmacy integrate a systems hardware with achieved and our outpatient software the recurring creates sell completion EHR their our platform, availability access the MedCenter to healthcare Epic program management Epic’s App of revenue. to developers Epic

customers to complete As deployments across networks with Willow. year. Willow later are using Willow XXX the Notably, Epic full to working and using result, drive expect integration, are expedite enterprise first are Currently, adoption currently with system our completed Epic we pharmacy in software there a we partners which United approximately be our States. Epic targeting health we Epic to the this delivery partner integrated

intended interface our software of this and for to providers. new user that faster MedCenters. rewrite faster team of recently software easier of of our enable greater our that to program deployments will completed enable facilitate believe We flexibility patients enhancements an and Additionally, technology technology is version our MedDispense a our

industry Pharmacy strategies segment. this our will Finally, welcome in optimizing the team instrumental who Broome, we and implementing accelerate growth initiatives in of Matt to joined our the be Matthew veteran, to Technology. lead

proposition customer, to offer strong improve positively understands MedCenter As satisfaction, outcomes. cost our a and access patient platform that and with former we Matt value the provider medication reduce impact

XXXX. at was spoke and are units. a cumulative with from end and the XX, We SpotRx model. the representing Services Pharmacy Retail December quarter scalable Net highly to ended increase at dispensing XX first QX deployment Turning hub units, XX XXXX of XX% pharmacy XX

our their expansion to and to continue our leverage our clinic partners drive broaden We to corporate footprint networks. current strategy they as with continue build

the Oak in partnership continues to we Street with four our to For add first novo contracted Arizona. grow. In example, sites de quarter,

our XXXX will Arizona hub our of adults for Medicare. both One value-based Tucson. located entered Arizona and with in target utilize Oak and existing Street in pharmacies of Tucson primary key markets, which Phoenix Phoenix care in centers on

comprehensive we choice. Street to with Health to adults. for to Oak has deploy line become in states clinics build excited operates practices. their XX continue of pharmacy XXX in care our centers across than more are in Oak senior partnership agreed Importantly, Oak past Street all of SpotRx our And partner installation and Arizona primary Street’s a

we directly to IMA sites quarter, IMA deployed Another example de with sites SpotRx their and the hub IMA into our five with expansion SpotRx Leveraging medical all access XX in We and Group with in Medical these pharmacy clinics across to installations at The additional for announce alongside Tampa. is in majority Orlando sites the began we network Orlando, have enable our patients expansion. continue partnership then we partnership XX IMA in Florida to medical centers. IMA be medical to growth and network centers will centers. embed highlighted to locations and plans these the pleased novo open IMA first that are Central of of previously our

next at over pickup local clinic schedule SpotRx reminder instant and IMA the from free patients in up home SpotRx model, SpotRx via all medical calls prescription, receive to the IMA contactless a delivery prescriptions medications access prescriptions chronic counter medications, care immediate pharmacist delivery receiving to kiosk the pharmacist day free follow will or phone. calls to the centers, after With for refill on or all access and

As serves XX,XXX a physicians Medicare over patients. nurse patients medical Florida and servicing and with over reminder, practitioners, across IMA XX Central centers

momentum will as the panels are of leverages continue encouraged partners anticipated our infrastructure. expectingly of current dispensing ramping be our scaling are revenue this sites. these late year, our patient anticipate in with partner pharmacy sites clinics novo We building by that by of sites to be and their this is We most longer de hub each

optimizing realize McKesson leveraging large and to producing RX opportunity enterprise. and costs enterprise we one, two, three, the effectively across expanding believe on MedCenters Willow objectives, and growth, and market key to profitable technology, we we our three increasing integrations, utilization dispensing currently are Importantly, are Epic focused pharmacy positioned drive

objectives on to As focus on our achieve prescription Part and our reduce of ineffective vendors part improved inefficiencies our as profitable optimizing driving reimbursement. our volumes, processes drive care. of center patient to and cost savings reliance goods to to our margins, driving respect prescription cost out sold growth, contact of with better our we previously improving is reducing strategy laid patient efficiencies, recall, mix, such standardize and

and utilization for also have pharmaceuticals strategy highlighted We of cost drive appropriate medications. sourcing optimal procurement at to mix a the

antivirals medications. Patients inclusion As C we our face specialty part as benefited obtaining such of add prior an to of from example, efforts recently, as value these most in access authorization. the high hepatitis specialty to medications barriers often

leveraging embedded counseling collaboration of any these address point to while needs medications team in providers our access Our the patient our technology to model powered pharmacy is by MedCenter care. delivering directly with at

in low and quarter While dispensing are the specialty medication better patient medications the determining most care. Willow made pharmacy purposes with growth for excited Epic volume, the opportunity and use effective of for mix delivered cost because Overall, first technology in we deliver integration. progress meaningful to to of and data high our the quarter-to-quarter relatively can fluctuate we the expansion

and to With driving strategies call review profitable to first As growth refining I’ll we of a our XXXX, march results. for provide we that, our Ramona of maximize deliver now financial our to focused shareholders. into quarter efficiencies on in turn to be value the order and the over remainder operational long-term continue

Ramona Seabaugh

Mark. you, Thank

ended the aided revenue the prior a increase pharmacy period was retail in over first million year. from This period services XXXX XXXX. revenue three $X by a XXX% for same increase XXX% Turning March same was the results. to in quarter in months our XX, $X.X of million, Net the

to indicated in sales. have pattern variable large the enterprise with from we purchasing capital can pharmacy in due be level technology customer associated part As past, quarter-to-quarter revenue

dispensing As XXXX of QX XX% XXXX Net XXXX. end cumulative increase Mark the of XX with mentioned, the from QX QX we XX. end XX deployments a ended at at units, was

quarter reminder, that the X.X% first network to as pharmacy margin was the clinical for board Pharmacy acceptance, from compared sites the the margins higher quarter payer that live, contribution Gross is units the a managers. account Technology quarter and are XXXX first approvals X.X% Consolidated benefited define staff clinical or have As we XXXX in dispensing XXXX. trained first segment. in from as

first Pharmacy the first XX% a million, gross first increase first segment of to quarter quarter in quarter the in for the XXXX. were $XX expenses XXXX from Total of margin $XX.X of from Our the operating X.X% X.X% XXXX improved in XXXX. of quarter million

XXXX. the increased reflecting of at our XXXX, calculate income $X.X in growing cash administrative a direct the placement. yielded financing X, General we our amortization, and gross first closing costs expenses costs million quarter XXXX, marketing first end and is to Our and the we the in of April ended interest loss approximately and the million executive of and of pharmacy and back that loss net equivalent. and depreciation cash proceeds of the compared results Adjusted of a adding by of of stock expense, exclude which quarter due common was quarter operations $X.X We first MedCenter of of growth of portfolio. on quarter $XX.X in Subsequent million loss other million. compensation stock-based the and to selling a to increased severance pharmacy XXXX in and first placement quarter $XX private completed non-recurring first of equity higher EBITDA, costs compensation to

subsequently closing satisfaction million have capitals XXXX, to on The $XX in we fund current to proceeds. conditions believe and needs. We the to of approximately follow waiver July operational second or expected closing is that following yield gross that the sufficient X,

to Turning outlook. our

We expect units XX to XXXX. continue XX net in dispensing to

closing remain margin throughout with margins back comments. growth the over the our balance we operating Regarding on And improving I’ll of XXXX. focused for gross turn Mark and costs to outlook, that, our adjusted call

Mark Doerr

joining you the look call coming now progress our on you, open Thank With that, to up you Ramona. today. it the will Thank updating months. we Operator? forward to questions. for We in

Operator

comes today go question of first Charles, Cowen. please Our Instructions] [Operator Rhyee you. Charles from ahead. Thank

Charles Rhyee

there’s I for progress a just, in made. on you I quarter. didn’t thanks. Yes, congrats that if first here. I release, Maybe Thanks Great could quarter the questions and the being for if share know, press count the the could don’t taking share see

Mark Doerr

Charles. Thanks, Ramona let that I’ll answer question.

Ramona Seabaugh

I to don’t we’ll Hi, have count, Charles. okay, the share but that. get

Charles Rhyee

Okay. All right.

to there partners. obviously, progress with going someone decision Michigan. Street, example, a move for with that case, Arizona talk Maybe here, after Has these novo. bit on right partnering into your wanted lot a an with of been Street, any with a So little in more the sites? it little the of Cano of discussions mixed. just about Because – de terms great seems like all of discussions pick to like their Oak sort companies bit with some in they’re particularly obviously existing Oak seems now,

is into places? – opportunities existing the curious discussion and to Just those any move what how like

Mark Doerr

Yes, Charles, great it’s a question.

I engagement ongoing our think sites both existing sites. have all we de partners with of novo around and

market. think I a follow Oak a than for Street novo pathway in new acquiring of they clinics in de rather case coming Arizona, the specific new sites to

the clinics Arizona be to versus And that where so that’s Cano in those. market market where why in actually them we’ll we’re existing with where in work them the a with able setting on following having Tampa they’re pathway

balanced based on we’re sites progress. so de and And novos balanced we’re and their between existing

We’re make sites they to new open for additional with us at hub have would looking up potentially that also where them, markets pharmacies. sense existing

Charles Rhyee

Great. when sorry, de five talking That’s helpful. contemplated this announced novo. last always guys And Was the you IMA, XX about additional and sites partnership mean was for the novo, de year. I – this maybe

of guess, have faster moving is your or this you I perhaps than question the might sort So is, is anticipated? track on with this expectations

Mark Doerr

up And the partnership, bring the think able embedded we benefits end initial expected. original in year the it’s SpotRx to and accelerate up their we ramped site. what IMA I signed for their the they this Charles, XX sort to through year opening from and last opened is of Yes, contracting implement the agreement online. that was pharmacy timeframe, when which getting site the the was Once having as wanted additional clinics. it now see was rest partner They in the began our to of fall clinic them and up of them four

the will clinics additional added. get where So five that’s

us an of where they sort us And around nicely want benefits their to similar they’re the Orlando of to in market, because each lines very clinics. they’re So in be Oak our Florida which that Street hub. one Central up obviously

Charles Rhyee

we we move reiterated OpEx that. course up similarly of Thanks a dispensing compensation? about margins. overall sort Great. Hey, and here. How to, you’ve around wanted net your looking G&A the just obviously, sites for Ramona, kind then the year of OpEx, step kind at for of just had outlook the should think and stock-based of as through

Ramona Seabaugh

Thanks. Yes.

as had the we look As associated at costs management QX, we senior vendor. as third new for some with of well the resource party from new a team, conversion development transition a

However, there’s would continue the XX% Oak expenses in to maybe into not quarters. that expected remaining be the say, QX. in XX% to about I will statement

appropriately. So quarters, rest adjust for the the you of can

in million of shares other outstanding far to was And apologize, those As your the board. compensation, get came as all the were March roughly XX, it earlier when stock-based XXXX. XX.X I disclosed of question, just question, executives to on your then as

Charles Rhyee

it just now. might helpful. sorry. That’s have I Great. just missed And I’m

line, saying there’s that one you’re That will was time the or of XX%. XX% G&A off. G&A So the to of it… about kind in is in Was that come sort

Ramona Seabaugh

will that not continue. That’s Yes, correct.

Charles Rhyee

and always I give I it in sense I update here? the this to Okay. technology new this where me, has you this on year, And would through for on as and the think MedCenter – think in this guess for where a help have know a side know Mark, an of forward brought – business sort lastly what’s really, company, lot about health the places outlook spoken think and the regards. opportunity of leadership how this I I implement. side Can for an make to then kind of here, past, could going lot the a this of that systems of course been, about there’s you we for the the of of you’ve about lot to going moving

Mark Doerr

that and President, Sales technology, new on over as before, brought He’s on announced also as the Yes. a we group. GM the to technology actually a the Executive to of and the I customer. sales business, question leader, have well foremost, Broome very I appreciate join entire the focus former Matt Vice first We’ve acknowledgement. VP excited appreciate

we’re very Epic understands to partner work, how going value now potential reduce to do app need feel like Epic and for that increase do the actually implementation. to up for to That’ll proposition product and So completed a team and playbook really building innovation the he talked the set the our to just pipeline. able any be to we deploy. to us full like the we’ve fast a well, proposition first Also, success. that value deployment I allow help our integration. about, do integration we It’ll build will team’s time us sales understand,

of and through We sales set our lot information appropriately. do funnel believe and time to we’re have up that to build. take a I inbound some going request it’s for moving those

year is that I what the year, really revenue before the business similar from So And current in to we’ve doing this XXXX we XXXX revenue substantial technology this this the setting up growth. we’re for said be anticipate for will itself. believe very

Charles Rhyee

helpful. That’s

of Epic Is really kind clear, then And Cerner the some geared really the you think business. I any major EHRs. fair other been with be for on, the And group integration as have maybe working often. a way that so technology just also progress integrating on run Epic of hospital it? to most of and guess, that’s guys practices that don’t to right,

Mark Doerr

Yes.

really component system Epic I I there’s delivery leverage health I right, that’s integrated XXX that when networks, target audience. about that of think Epic. mean, management about our think, Willow, And pharmacy systems

think and cetera, et MedCenter where place sites, XXX room, care, think they emergency places the participate of a multiple so you could they inside roughly community site, but that in. the based practices urgent So have

And And system, have other we so not that large the in and do opportunity itself. previously enterprise we thing interface sold. in think group of a which is being there’s McKesson the advertised and the with was

market that we’ve actually And effort and after made particular as to an go so identify well.

So we’re product demand. next be by of like customer point EHR, ambulatory, customer let that’s Cerner the what integration your demand to or to trying will we point then really expand and have will whether integrations really drive other look that our inside some that two driven we’ll

Charles Rhyee

I different you’re I maybe That’s great. around do have these two your inbounds, how the I’m to, about add pipeline. getting that then is the if currently and kind is implement you much also able pipeline, of sales guess you questions you And that to implements this side, health clinics second building be skill set sorry, that talked that the the then advantage ask this can can of to is And or to take of that’s about to a existing kind it complement at force, inbounds very team building implementation system at on same needed? – it or a have

Mark Doerr

Yes.

on if they as our integration sales actually account the actually the sales side, slightly, the transitioning team bringing restructuring help question are phase. we’re and So sort the sale of we’re team into in to management partner implementation you from a

we augment going current such the monitoring We’ll a so to think our existing we to significant help keep that inbound. And to team. that’s be sales don’t have team

implementations this as sales we implementation would that’s kind the of team certainly added focused front, don’t a add, on support. for have site to So at team we’ve the add if account sales. can already but do have management. in And gets need that point We the on technology sales we’ll pipeline we then larger,

we can the business have no inside additional and we implementing scaled our down. can two again, have, going technology largely skills to clinic a So ramp up need implementations actually largely are and that us one team the minimal SpotRx or such between appropriately our there. the for we flex segments. of those a very transferable, implement add we or the whether set that differences, and whether for sale, point ramp we’re skill whether similar this we’re think resources we’re And they’re there’s clinics to At

Charles Rhyee

that, of was of guys some just apologize site to sites so Great. what us And when the you’re have we sites new first when and around Can into this of you bucket. know percentile, to about kind revise then tied in revenue sort going kind feel had median know on here, the quarter? you revenue say dollar going the bit the sites, sites in kind but assumptions – of a I the and opportunity utilization. sort on think of to the raise, you dispensing keep seeing little site dispensing about did the versus in you around hospital of How gave sort details the the environment? utilization are XXth the XX you particularly I is I of what do give million you let’s you dispensing for per the what companies – of the on some maybe characteristics their that maybe some per sort kind so which of current gets market.

you’re Just what your thoughts there on curious seeing.

Mark Doerr

old are a or less majority I’ll on wants, specific app at entire track And been the in against tracking live let at I’ll again, our the obviously. Ramona she far Florida any those we take this question would’ve weekly expectations. that what market market’s we’ve expected our at young sites as a as we the have than above market fairly the is a add least basis that them largely point. such again, year and us And sites Yes. of brought expectations being that for and

I think clinics And quantify of those that performing of first each that so the is within expectations, historical to on qualify ramps. team’s done work reflection to is of they’re aligned do we which what that a the with track around in our such range sort about what the we talked individual those quarter one expectations. And the is and

from market we’re component seen their visits that, hearing patient out our we’ve Ramona, come based MedCenters, partners, also and and our you utilization, not as coming sort we’re the side of on else to if I what SpotRx the on prescription I seeing know that then our the side, well new only you think our want pre-COVID on add. think with utilization don’t clinics, what anything new as I of have but existing back base.

Ramona Seabaugh

No, Mark, all, that’s you covered everything.

Charles Rhyee

for maybe And Great. then. Ramona one then

pressures, chain obviously, as expectations issues, you inflations, Just your anything wage for supply outlook as for do in curious particularly the MedCenters, there think manufacturing of we think inflationary OpEx? about consider new you forward and anything sort

Ramona Seabaugh

Sure. Yes.

we components to to the today As seen inflation a where to we’ve we’ve and monitor impact we’ve any market, the that very at MedCenters, the market respect continue we be the to rates good monitor And pressures, fill able place that we inflation mitigate cetera. are expected. we put in have the to where large We’ll feel with not fortunate labor continue business. to our to with been yet about risk with our position

top to far, be issue. and large on had of So continue we impact, that but have we a monitor not

Charles Rhyee

I a comments. all really the Great. lot. Thanks appreciate

Mark Doerr

Thanks, Charles.

Operator

hand call Thank back now you remarks. for final questions, your Mark Charles. Doerr any to the I’ll for

Mark Doerr

I want thank good attending evening. this care. call night a take Have everyone and the for to

Operator

for joining Thank you conference today’s call.

now disconnect lines. You may your

MedAvail (MDVLQ) 13 May 222022 Q1 Earnings call transcript