- Earnings call transcript Q3 2022

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Operator

Hello, everyone, and thank you for joining the MedAvail's 2022 Third Quarter Earnings Conference Call. My name is Daren, I'll be your operator for today. [Operator Instructions] I now have the pleasure of handing you over to your host, Ji-Yon Yi, Investor Relations. Please go ahead.

Ji-Yon Yi

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, Inc. MedAvail today, Earlier referred MedAvail XXXX. the third to results quarter financial as ended or the September XX, released company for on Copy press of website. release available the the is company's

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

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

Mark Doerr

you, Ji-Yon, Thank and good afternoon, everyone.

of XXXX, quarter generated XXX% Pharmacy same in Year-over-year in make pathway same the representing period third approximately XX% in third essentially at to strategy XXXX. were on XXXX. progress Net was revenue revenues for Retail increasing third over quarter Services Pharmacy continue period growth meaningful We over the million in to growth profitability. flat quarter million, the $XXX,XXX. $XX.X the revenue in the $XX.X our and Technology

largely events, detail. quarter, through more in walk to revenue and experienced overall which revenue which be we with negatively our expect our transient. we the line X will While Ramona growth expectations, was affected strong in in them

million at firmly least full track $XX However, deliver for revenue we to net believe guidance we remain year of XXXX. on the our

XX MedCenters are to raising new for net dispensing We of MedCenters our year. XX this least also projections dispensing XX net to at new

Retail ended XXXX, two, this dispensing business. a were driving dispensing growing Pharmacy with gross units. with and our that MedCenters cumulative poised SpotRx. We new third This prescription dispensing our are Technology across end of: objectives MedCenter margins; to notably target at strategic four, total key with of efficiencies our existing costs increasing one, deliver confident XX%. remain to year-to-date XXX MedCenters exceeding as our the of operational QX are XXXX our XXX deployments a increase June we units network; of business year Net well and reduce quarter Starting XX our expanding from and momentum in markets. we update Importantly, Pharmacy enterprise; Services for increase XX% net of dispensing the represents an we units, seeing XX, our dispensing across on the three, entire and on XXX

We already their excited is our in target to team's strategy the growth organic a testament MedCenters footprint growth profitability our broadening dispensing to our clinic XXX build networks. of have to drive quarter, milestone are achieved by they commitment XXXX current to through partners our as with third

We Street Health. continue Cano our to land and and such Health Oak expand networks with strong as the of partners

expect SpotRx South Health This additional will expand services SpotRx sites healthy work partner, partners early we available which believe and from [as Cano support and our we select Cano's We be leverage pharmacy We Health, existing with locations to relationship Florida will in Cano XXXX, our to productive key partners]. X that with our highly continue to clinic deliberately to our clinic integration patients our at model. to hub-and-spoke are Orlando. expanded

continue medical alongside XXX,XXX than with to organization a members. Health, value-based pleased to Cano delivering technology-powered are centers, to more high-touch, primary We XXX care over grow care

in announce with are Group a in we partnership clinic beginning Medical new one Additionally, with Aegis to Orlando. pleased Florida,

our driving medication impacting value partnership from positively provider and a interest physician and satisfaction Our came of adherence. who by an patient Aegis, at proposition understands

value XX excited We network our with integrated and opportunity partner. has SpotRx Aegis and the an across for across expand new of XX to demonstrate Aegis' with locations the Florida. are network affiliates

expansion Orlando, to existing both our on in strong Florida in pharmacy opportunities growth. Importantly, and pursue substantial execution will our and Cano represent hub Aegis reflecting leverage strategy profitable

expand costs our while organization. to on initiatives gross our of margin an target mid-teens strategic our One towards driving with across decreasing centered eye pillars of is

quarter, margin second the an third the XX.X% quarter-over-quarter quarter. quarter gross margin, X.X% during achieved second in we expansion the and delivered from an the continued improvement During on

prescription team's delivery on core contributor expansion. to Our margin streamlining a focus was

to to our part As optimize measures this improve engagement focus, inefficiencies within utilization, patient workflow. we continue hub pharmacy and identify opportunities decrease implement of and specific

may we of utilization medication payer in One costs fees adherence or anticipate we believe to measures to contribute importantly, reduce by adherence. margins margin increased our for improve driving to will which a patients expand [plans], the dispensing patient medication third we are our place for specifically, key cash generic target provide overall most to early. This in that charged average of result year DIR SpotRx, is of and quarter, milestones to our the down turn, XX% near of our term, fees measure the putting the in to improving and In price sales increase our in our reducing and by medication rate driver to us compared but this our to key cost-effective product reduced gross prescriptions X another burn the will QX We exceeding technology. XXXX, expansion. is

will Further, we QX the simply profitable XX% reducing goal costs. accelerated to the highlights prior demonstrate as quarter and long-term savings walk of over fourth on focus these fiscal quarter this pharmacy in than achieve expect in excluding year. compared the operating our XXXX drive measures amortization, our quarter, additional year shortly We our show on third further burn in costs the to over cash team's came to lower time. XX% rate savings Ramona some the These through of cost implemented of growth to year. same

component priorities major with Turning our segment announced growth. this Technology. in of We key and MedCenter partnership to Pharmacy we Florida. Rx to In is detail, profitable recently our believe a the of is technology, a reach MedCenters MedAvail one deploy broaden Pharmacy X more which to agreement PharmCo our to build

segment, Technology As our and for software license our a reminder, and provide predictable platform, intended systems hardware highly is importantly, our and recurring to our within create we business. profitable to sell revenue our maintenance and which Pharmacy

trip to refills visiting PharmCo virtually with pleased PharmCo new eliminating the and Rx our objectives we prescriptions to consult growth margin. are of to reduce across on separate our prioritizing expand to are MedCenter, and their at cost or pharmacy. and their the executing a and strategy a In patients the focused need closing, with through pharmacist with make gross up a We provide sites care the fill partner these to point pick ability Rx to

to strongly positioned the for ahead of the that is pathway our of look third to turn to our we and profitable our now I'll deliver our on As review shareholders. value results. growth bright. are beyond, call quarter provide long-term With year Ramona am and that, over I financial future to durable we a remainder confident this

Ramona Seabaugh

you, Thank Mark.

ended months X the for of the $X.X a $XX.X same revenue Net results. XX, quarter in third increase our XX% was to prior from the Turning XXXX, year. million September period million,

we headwinds dispensing, lower tool refills, portion transient carries and experienced in patient As impacted quarter increased a including Mark pharmacy some engagement noted the third revenue which in Hurricane the Ian small our closure our due average in for with quarter, to Florida from earlier, generic that sales a price.

to growth. factors in impact and and we're of to face mitigate clinic-by-clinic Our team challenges, the the strong of these able these deliver rallied year-over-year

partners clinic, Further, on we of centralized resolved with with optimize all performance engagement expect disaster. largely that operating issue of a this will start have the to with the quarter, face and resiliency our partners exception costs. Florida MedAvail commitment solution the in even our reduce and as the of patient a We one clinic our refills demonstrating natural and team and of open of patients our of were fourth our of serve the

achieved net the Pharmacy In XXXX. the in anticipate the we result, revenue a in quarter was events, we from to Services. in same period QX, fourth these a factors in As aided record Retail increase these by over of XXX% Retail Pharmacy our Net in significant revenue spite quarter. a third do revenue Services not in impact quarter revenue

can We XX a increase As dispensing with the QX be end ended QX past, in the from indicated we variable associated Pharmacy revenue net of sales. XXXX patterns purchasing capital large quarter-to-quarter part Technology with at in due customer XXXX. enterprise-level from to have units, XX% XXX

We achieving XXXX ahead net of are dispensing was XXX now cumulative the of end year-end XXX. QX milestone our of Net deployments at units.

and account dispensing pharmacy we or net from third contribution $X.X of that X.X% the X.X% ability of third million segment. a approvals is gross quarter as optimize trained reflect was highest sites for network Pharmacy quarter units achieved a such in payer margin XXXX. margins. second clinical have or that as acceptance, million the XXXX board by managers. to staff third live, $X.X the in our define to margin continuing clinical the one compared company sites Gross meaning As or history, reminder, rate in XX.X% are the XXXX Consolidated XXXX quarterly the the margins from and to higher XX.X% its benefited quarter and Technology of gross commitment quarter in

segment third in improve X% quarter gross marketing $XX.X costs to third and in increased the million, from gross a in revenue portfolio. of over $X and share-based XXXX MedCenter margin from Profitable primarily quarter of X% noncash company just the noncash XX% decreased expenses of year growing the compensation. between XXXX while X.X% amortization from the team increased General of QX Our direct out Selling quarter growth the quarter a year the of XXXX wages of in of period. to Pharmacy period increased and to third pharmacy by XXXX. for to million excluding expense the XXXX XX% of third Notably, quarter as our X% from and Total increased increase operating expenses, million in Technology were third set fiscal the accelerated is result the the prior and due quarter $XX.X of XXXX. fiscal $XXX,XXX, improved third same administration in XX% for third the XXXX. of operating the of to costs margins XXXX quarter the year comparable in increased net focus

our company's in the optimize the from further refills XXXX $XXX,XXX. order of operation or to XXXX. pharmacy XX% change engagement third amortization to approximately and tool for in patient accelerated reduce is driven costs The decision decreased performance by operating Specifically, expenses quarter

relating line partners have with of de is I to a MedCenters. we leverage our the Importantly, while our we savings implemented to reduction operations operating to bottom lower measure address To clinic believe our volumes and these contributing example that work to efficiencies. initial to existing by in our improving greater moment at improved pharmacy new walk novo cost this with cost reflects take contracting sites needs to for our sites. through another want a objective of team achieve addressing our

with a we partners clinical on-site in a clinic which model manager with have patient account our rather implemented support our than initiation virtual to team MedCenters. have We activation patient

patient and We services are of with greater our [cams]. efficiencies adoption already encouraged virtual to see improved our workflow

result will over and to calculate ended cash and medication expect compared by XXXX this quarter our that costs. exclude new of April. $XX.X loss reduced amortization, third XXXX in engagement of other depreciation We million income third and million XXXX the equivalents of the completed in interest and the EBITDA, $XX.X result of as time, million We cash to $XX.X million in a patient of a nonrecurring deployments volume of XXXX, Adjusted of approach quarter in adherence, growth which $X.X in compensation, back prescription in of net placement quarter adding better and with stock-based loss and expense, we loss in third a and reflecting was expenses increased costs. second quarter private the and operating improvements

of closing gross XXXX, proceeds. second placement in occurred The million on yielded our additional $XX July and X,

believe sufficient needs. operational continue to fund our that current we capital We to have

count quarter, and shares. we the stock of approximately of share million to expect have XX for quarter we now million [XX.X] third weighted of approximately shares have a fourth outstanding, the As common average

full Regarding least revenue $XX of net our our at outlook, million. XXXX are year we reaffirming guidance

our XX net to we units. are this Additionally, as expectation in dispensing range at to of already we least units ahead dispensing increasing are XX XXXX, net of XX

our we focused outlook, XXXX. balance adjusted on costs of margin margins gross operating and improving remain the gross throughout our Regarding

closing target within Our target to margins we gross margins in the as X the to of to over gross progress on track made significant And X% next quarters Long already. for the X% we call that, back remains mid-teens. I'll have Mark term, with turn comments. continue

Mark Doerr

forward with pharmacy outcomes mission. on technology it you in now first. you, to Operator? industry we we the to retail our questions. progress as disrupting remain putting that, our execute Ramona. to on differentiated committed our We We and Thank to the MedCenter solution traditional up look and will experience patient months coming open updating continue With

Operator

Our first from Lake O'Neil Street from Markets. Capital comes [Operator question Brooks Instructions]

Brooks O’Neil

solid the on Congratulations results.

guess meaningful in opportunities So or are see the I expansion is, a have couple I where about I'm talked you that. But Florida, there term? of first in any about one bit a questions. and medium other areas quite short you expansion excited the

Mark Doerr

the Brooks, question. for thanks Yes, compliment and the

in to focus and markets continue in our Florida not Phoenix only expansion on that's there. to with be board The California. state acceleration. all well now seen of for the SpotRx expansion. where Continue We happens to because anticipating of Tucson in as both regulations just partners one right where and we're as at clinics Michigan, we've Arizona, work

Brooks O’Neil

Epic. you on in a And pharmacy you talk I Good. with tech think and bit I don't Okay. then arrangement heard you're what's heard little going and about making mention the progress I there. any Epic

Mark Doerr

remain That's year our first integration have the with that there. our our is consistent we we're guidance Brooks, past full Epic the by end completed confident partner. of Yes. to with going

pipeline help with So that, do We for nothing build new that's there. to to anticipate us going XXXX. the

Brooks O’Neil

Good. think there? in and we September, talked Is then development a Okay. specialty opportunities say little I to when anything with the together And about there bit with we about generics. were

Mark Doerr

those I parts. Yes. split X

were [light] work to making initiative. specialty, on us the where focus reemphasize sure specialty that the a, places the where QX, we in on and call it in retail, that our we that on what we good focused got continue make expand maximizing it's think or the We that look dispensing. in we would quarter second generics, progress I helped we're of at margins. specialty When along one we program and for this really

standard, overall is our what maybe call industry So the now XX% generic close would to versus brand high dispensing I rate generic. to XX% the

benefit the both teams and really to have the best obviously partners Secondly, patient, using job clinic to cost SpotRx. in which a provides generic preferred done the to our the nice

expansion seeing dispensing margin look that the the the utilization at generic rate reason business. I and the is So of you're main in the generics the preferred

Operator

The next Charles question Cowen. comes from Rhyee from

Unidentified Analyst

This on guys experienced, dispensing on to for Can elaborate have also that the issue can is happens have a a something headwinds impact. Ian deal you us give and what you on with. led the of revenue is I question overall Charles. [Lucas] Hurricane and you you revenue obviously, maybe generic to And that? just if the size

Mark Doerr

obviously, impact have issue, can think the cost about generics that, thanks referencing sale minimal can't the when dispensing near-term we what headwind. [And] X/X [Lucas], -- a brand you fairly think headwinds, control I But average weather When the a lowering about price. the on obviously, other increase was for with joining. When generic that has. of Ian. we your you're

issue going by of transient was QX don't fully used it's the expect to of and track first the and pharmacy already, that those. forward was QX. The in and more identifying tool The about carry ourselves. with having talked in. issue the We We refill management an not centralized that's And the our refills tool did other tool. patients. our did we we to the small that coming a widely end year. impact issue tool. headwind the selected relatively implement nature, phase efficiently with mitigate easier referenced execute in implemented with that developed we've such that current industry a in that's and We're into data in we with had refills [to] remarks, prepared We of to an the business the as against believe have solution And in the opportunities it all we we

Unidentified Analyst

Walgreens? has discussions? Just looking telepharmacy anything changed that's new been for there prescription been And the any there with and update mentioned kiosk. then into recently an getting relationship there on that. with Has Have Great. Walgreens Okay.

Mark Doerr

We adoption such We're ongoing patient-facing shortages can't the on any we retail with pharmacies technology to and one costs. headwinds increase, I lines. specific discussions experience and labor of partnership think several as going based have those speak that nicely the partners. pharmacy that's really seeing with along MedCenter increasing

And for speak so discussions we're segment, now. I the to think build technology single any I see our but to right really XXXX ongoing can't around pipeline starting

Unidentified Analyst

Is specific I new And clinics, about guys manager? you. or if ramps staffing talk of look deploy an volume the virtual once up for strategy you roll staffing up that to where sites in-person maybe that that at something that something that heard we right. will end a are managers you kind you you that. MedCenter, could to understand site will looking if maybe out it over Got more with Just the maybe time? Or when to manager? to Then not will Understood. on way new virtual is that converting comes

Mark Doerr

Yes.

doing we're think I well. be is What their they're I strategy, we're say know we strategy are the you've what that volume. novo and there's low it implementing with that clinics, clinics going right, [panels], building contextualized with would de new, that to pretty patient brand

impactful manager. can third qualified with any level So we We to the a this an results it a in and on of we speak And to really started anticipate support account support clinical that would manager And virtual labor on-site testing highly late need we're to now. we have are build clinical be manager don't site have that account manager. that's quarter. partners actually We've But with to would we at do we that where to the point. and certain activate volume right in model, model. when our that to understand account partners. the we're add in it have a get our working We don't patient more what [pilot] clinical as clinical ongoing and to helping account call into how that

Operator

We do questions further not any at moment. this have

for So any I'm going to Doerr hand back Mark remarks. to final

Mark Doerr

and call. say Have I joined safe. everyone to again a want for good stay you evening, just that's the thank

Operator

today's This concludes joining. Thank call. you for

may lines. now You your disconnect

MedAvail (MDVLQ) 14 Nov 222022 Q3 Earnings call transcript