TRHC - Earnings call transcript Q3 2017 | Tabula Rasa HealthCare, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Q3 2017 Tabula Rasa HealthCare, Inc. Earnings Conference Call [Operator Instructions] As a reminder this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Kevin Dill. Sir, you may begin.

Kevin Dill

afternoon. good and you, Thank I am for Chief Officer Counsel Dill, Rasa HealthCare. Corporate Tabula and Compliance Kevin The to Act of the Company harbor Private safe intends Securities avail itself Litigation Reform of the XXXX. of provisions meaning during this be within Certain statements of call law. made that forward-looking will statements the could differ the statements to materially expressed implied by that from statements. forward-looking Rasa HealthCare's and other risks, those These Tabula uncertainties actual forward-looking are factors subject cause results to or for may market enabled the to developing clients. nature and risks and healthcare These uncertainties services the products and include laws of and impact technology potential changes regulations that our

investor Rasa relations of additional turn our call a through facing days. XX of filings Knowlton, risks Tabula is CEO, risk on Founder, SEC page to the available recording refer site the Chairman to including Calvin please our I'll our this be will and For Dr. HealthCare. with on of and information factors link accessible Rasa Tabula the the it for section the HealthCare, over A call Web of S-X.

Calvin Knowlton

year. are Mr. Kevin. Chief Officer, provide Orsula outlook our on update me who as as in the on quarter provide an well today market, who and Dr. Development our our for you, Thank Marketing update Knowlton, our of will PACE the our financial leadership Brian New Business fiscal Adams, With and Chief Officer, will this Financial the third remainder

strong one in and was Tabula the The expectations developments reported beat another third positive financial where very quarter for Rasa we some our business.

third million from quarter XXXX. in $XX.X million XX% the of revenue increased Our of $XX.X

our again strong. in performance had business, we solid aspects was all particularly of business While services the

over and increase year. some for early million, I SinfoníaRx a EBITDA also will with on will success. of the from to $X.X begin adjusted the came update an provide Our discuss last integration I quarter XX% enhanced Tabula medication discuss to market, market before EMTM the and greater market it broader in the therapy turning Rasa I the detail. will PACE an review update management Orsula on market, then to

you of medication aware, SinfoníaRx, we management a our As commercial announced acquisition of Medicaid technology provider are and Medicare, September early in plans. therapy health I many am of services for and sure leading

working few financial of phases weeks, and we cultural Over initial have been the on integration. the past our

is have or options IT well. We the the explore started Both to and would alignment entail efforts very client not these many TRHC early expect with and extensive general, In also initiatives results very collaboration. integration XXXX. however, regarding late of going of we XXXX see until to these of planning SinfoníaRx

with from seen have very cross-selling some positive We materialize our both of opportunities quarter. the in fourth reaction customers could early that signs

MTM Turning to enhanced the market.

using identified scores. is program Advisor. based in our those My and the enhanced pharmacists manage is the platform pharmacists focused safety January, decision will the hospitalizations. community perform network have patients MTM two a develop Advisor, patient support remainder year seven MedWise quality along we of a consumer introduction the of our of As of MedWise will our optimize enhance of as reduce pilot life expanding two, Advisor, of plus medication enhanced deploying continue for regimens, version, year this a to Beginning XX. platform, technology, medication risk tools risk states In we medication which upon stratification with program to we starts XX% program region January, proprietary In on medication MTM and MedWise which disruptive interventions coming use throughout our medication

of to and market. understanding Smartphone MedWise our patient out our are rolling and the enhance continue performing services Advisor, actively products patients be we to engagement will acceptance also app, region that eligible research throughout We My and market in to

enhanced to encourage pilot our of year CMS across prescriber improvements contacted regions pleased as and which the portions are by program to throughout country. be were interested each to a test up work The involvement in their to other the technology and set model that of working we best apply by educate prescribers region are cornerstone in organizations the the January [ph] three, was one various We other for other drive commencing practices will in MTM [drafting] into regions EMTM learn is MTM EMTM of enhanced program. to starting XXXX. engage Finally, be from

With the Now those. beyond stratification health in-home using on we EMTM, our very and touch the also entails in broader risk process. risk our medication engine, stratification I of a specifically are two-step broader which health we market, in some promising typically will both plan also care are with plans seeing our developments engine program. market, transition collaborating

stratified health we different in our components, patients population over and then aggregated year-end have we medication numerous using software that pharmacogenomic stratify risk expect the histogram By for risk score million a plans. First, pharmacokinetic, which proprietary risk as includes presented XX to risk medication is display. pharmacodynamic an

You may we call had X million stratified. last patients remember our approximately on earnings

have zero risk the technology step a twice ranges risk adverse is for plan the second mitigation with leading these XX% over homogenized intervene of to score risk to charge. using score event. risk health and is expenditures license a medical Rasa to Tabula pharmacists the is the efforts the our risk or high mitigation all and to pharmacists risk at highest of allow our efforts average XX. medication their on X% Our can we drug Then XX are spending can the patients. lives to for above perform take which the is at Anyone from XX. what medication found preventable includes commercial Interestingly, factors, at about we least

early now [ph] our in-home readmission the results a show that about as to average. [hospital] care half cohort programs, our Turning transition our rate is national

are our program, We plan health offers reconciliation pharmacist expanded these pleased are that and results. their agreement XXXX. for we that has medication of excited care one Furthermore, by partners preliminary in-home our transitions renewed

the exciting finalized our XXXX. to lot we over where for PACE doing at priorities now. a discuss of a have things right strategic just market. Rasa With turn that we retreat Orsula? call the Tabula finished to market I will happening So Orsula We

Orsula Knowlton

Thanks, Calvin.

Calvin's is getting to continuing PACE traction with market, leadership In we the in remarks addition market our broader healthcare penetration. to around our expand are the solution

We the to organization are the in organizations of with supported In quarter during a Conference recently customers. providers encouraging. extremely third pleased quarter. contract from in PACE score has pace returned Annual PACE to PACE PACE implemented we as our or initial we the existing as new our Boston National medication well response Association unveiled three The been extensions the where startup the NPA, successfully market. have from We a number also signed new Midwest, risk

physician finding that medical medication traction using director physicians are risk PACE to other quote to harm by prescribers couple as on risk to score. communicate approach the physicians and the help my harm was me a valuable Our a this do attested of about their no A include, medication conference to help with and medications. the caused the of demonstrate XX based from risk. it job An is unanticipated patients first of identifying score is zero to

PACE my population. great adjust at understand conference we to ways presentations their organizations PACE Another, that are medication. need eligible their help tool why dual bedside the growing traditional Numerous this to identified is a participants

as review that dual care The Medicaid is the from to We York an standard all integrating their conference, integrated the integration population care SCAN of not high-cost specialty Foundation for State Brian will PACE will the more Department to well Medicare medical of that Innovation program. access Health. are terms PACE program. the with ten offering support high-need, servicing SCAN dual the care comprehensive receiving Medicare do tight creating the profit over well market, are launched the entitled X.X late report [ph] York than can adoption [seeking] many care. This growth, housing New improved other. turn presentation Adams highlighted clients support environment Medicaid program report, talk of find NPA in in living and between drive organization to CEO and A. York PACE across Hartford also strengthen referrals state and for such of members eligible The the the healthcare individuals care programs providing providers PACE Dr. themselves is developmentally is I in review PACE Medicaid. primarily growth PACE the or the where hope top community X.X, for eligible one elderly challenging For because entitled between PACE XXX,XXX that that quality driving example, Bruce to and enrollment assisted a and services eligible, and September West the New the New social PACE further of partnerships in the and drive Medicaid. this the eligible PACE in often PACE dual Overall, John issued our and offering populations less elder Health, In Chernof, eligible. population Medicare work the using Act, XX gold third our with demonstration physicians, social at provide wavier Way. care state lamented Chernof country. in from starting manager to such model dual be the million drive as in with eligible that call for growth of quarter complex based inclusive for notes two and delayed existing With Medicare both that the alongside a demonstration Brian? recommendations for the duel they and that innovation to of led both Dr. the the are by to for of of roughly life launched our to Also Foundation initiative Foundation, act. each PACE and the expand detailed to the deliver healthcare programs vocal for aligned provided will project Medicaid the PACE best enrolled the Patients PACE and in caught optimal NPA the the initiative using individuals the very results. not from by the

Brian Adams

and you Thank quarter thank all to call you, discuss joining our third evening for the this Orsula results.

ago. in of a Product the year in $XX.X For of year-over-year. was revenue same million XX% quarter $XX.X period to million, the third $XX.X generated increase compared million, quarter a Tabula Rasa total the XXXX,

factors. medication Service a generated our of this revenue by mainly client our reminder, base. through result quarter two include the quarter third in the management the quarter, of and and product pharmacy quarter PACE due came in is third the as medication well which current within business, in management million contracts, contracts risk SinfoníaRx $X.X expansion The driven XXX% market an also XXXX. the at our was our the primarily from contracts the As management revenue growth of to cost now was as in risk primarily risk-adjustment non-PACE increase increase

SinfoníaRx management First, a medication from second, and contract the contributed contribution $X.X million. which therapy enhanced $X.X business million our

closed a of will sharing standalone our acquisition their X As September and of only until reminder, be SinfoníaRx year-end. results we

mentioned, quarters, Thereafter, just service $X.X in quarter the SinfoníaRx we be generated same will year. past a higher revenue revenue associated is and an Tabula Tabula during gross can this with improvement in to I versus attributed results last margin. XX.X% XX.X% period the gross in contribution service which as revenue. Rasa quarter Consistent their this increase a with with margin Rasa's combine of million generated

to gross quarter, margins move a compares our in XX% of business. portion gross closer in achieving our consistent Service the we This of quarter as range, quarters in XX% quarter of of XXXX margin in to in trend XXXX. third of expectations quarter continue revenue the of on third XX% well of stated right previously This to the as third Products XXXX. the the our service customers XXXX, was as margin constitutes was great direction based line XX% in of goal third XX% as this XXXX quarter year. the new the result first with on-boarded with gross two to we

see the and XX% in approximately over is in significant and met with contracts a services. for gross SinfoníaRx decline combined service expansion medication management as from years do which margin risk represents from combination line expect to these this expectations by the year, the two generate generated outer SinfoníaRx this margin XX%, of our service revenue. represent other business is our the with efficiencies last We Although the with

ago. XX.X% represented quarter, up same this expenses total year period the operating revenue in XX.X% Our a from of

the $XXX,XXX. included to expenses for related operating expenses business of Our for approximately transaction of approximately an SinfoníaRx of and the acquisition consideration $XXX,XXX for a charge contingent SinfoníaRx adjustment the

third to company These incur of quarter. during operating Additionally, in we incurred the related as cost a $XXX,XXX XXXX. public costs approximately did not

GAAP the net Our GAAP loss compares quarter income million $XXX,XXX XXXX. a of $X.X of third in net to of

a our quarter generated EBITDA function allowance in We adjusted and resulted deferred quarter we During tax of $X.X of ago. windfall million a our $X.X third adjusted which to increase tax portion benefits reversed XXXX, in $X.X of million. in recognized million The benefit year valuation was compared businesses. the all third of in a growth asset the in of tax a EBITDA onetime

net business income per income same the of was GAAP period SinfoníaRx in EBITDA on share margins. share the EBITDA services year. quarter impact GAAP as $XX.X in last the diluted see income the net higher per with businesses compared approximately loss the was XXXX for adjusted diluted XXXX last for third third the calculations quarter of XXXX EBITDA quarter. Additionally, share quarter XXXX. contributed per per of of of we This adjusted net income million the and began The are to third to XXXX. the count diluted diluted was to quarter million diluted compared of margin Adjusted versus share for of of $X.XX was $XXX,XXX for overall in third expectations adjusted our Adjusted XXXX net share based quarter to per margins having $X.XX loss share of on the year. XX.X% of the in for diluted compared XX% line $XX.X quarter $X.XX $X.XX quarter for third third of net third

previously of well benefit As of for reminder, fall allowance the tax of value Transaction net to release in the expenses as income wind valuation benefits payroll stock-based adjusted per the share diluted our compensation, on tax related changes recognition stock quarter for option as as stated. our a partial exercises. excludes related and and I contingent adjustments fair tax consideration

Turning sheet. balance to the

$X.X XXXX, is $XX from we which and positive operations the increase increase our last the As a SinfoníaRx line quarter on use from of September million. for XX, have today we cash we closing balance of the credit, of initial to result million, of drawn flow of had payment acquisition. an of $X.X The as finance cash million

in Additionally, we have outstanding leases. million debt of $X.X equipment

full on of the over I outlook I for turn fourth for our provide the will Cal, an XXXX. an Before call back outlook to and the update quarter year

have and three have adjusted of seen As you quarters first quarter-over-quarter sequential in growth the EBITDA. revenue in we the both year, realized

$XX.X We We to in to of projections. $X.X expect million range $X EBITDA range to With the that continue taking for $X.X of trend the in three quarter behind update range be million fourth be the XXXX. of be income Net to full anticipate are to this quarters us, revenue in $XX.X million. of opportunity the to and to million, adjusted our million. $X year million to we

created revenue the with We and by benefits EBITDA line tax account our guidance. to last maintaining the in range to income prior for projection the our account increasing are adjusted increasing revenue projections our net for quarter, acquisition, beat SinfoníaRx

we related range $XXX $XXX $X.X EBITDA the to compensation to be to issued million. expect second million. range million quarter in today, of million in initial $X.X that of in $XX.X you grants be offering. of $XX.X the million stock in first to restricted Adjusted will million expense be the Again of XXXX of net connection in $X.X we to revenue and approximately million we to I range remind quarter stock with and to the have As income the public expect

third partially reversed in recognized benefit $X.X windfall have of the tax valuation allowance quarter. onetime and million Additionally, our for we benefits

quarter only the to I pleased projection, be third year using would Finally, the our full you for but rate for incredibly not were am revenue from date. run the million. with it results $XXX annualize fourth our if quarter to the

to continues business well. Our extremely performance

never I prepared Cal Our remarks concludes more been Cal? the my smooth SinfoníaRx pipeline That closing business and the been back robust to with the for has process call far. integration turn over comments. has so very will and

Calvin Knowlton

excitement seeing with business and our members. the Orsula want express want Rasa team as Brian. we our results Tabula I continued of believe to progress. broad. members thank in really Sinfonía team also have updated always to ahead are partners, and forward to have to and very you, And Thank momentum our new newly quarter our customers, our am and pleased my I third us I continuing to on as interesting organization I how of combined some on our incorporated opportunities we all things you a look I and keep

So to with questions. Operator? open that, let's the call

Operator

Matthew question of [Operator comes Baird. line the W. first Instructions] with Our Robert Gilmore from

open. now is line Your

Matthew Gilmore

Can and start ask guess going would bigger to is Tabula PACE the remember us [indiscernible] relationship with determine this the I turn of of Maybe are and one what with then are you that rollout for for platform. I business thinking that quarter. members then the the to correctly, you maybe the first future those transitioning months few about If over into update centers announcements wanted just in terms to the periods. on how couple has a which you and of progressed

Orsula Knowlton

Matt. is Thanks for This your Orsula. Sure, question.

transitioned have a about this continue more We with would to to we we with expect services to So news the services. this first one week and location so actually our quarter. them for have we meeting regard monitor

Matthew Gilmore

on the Great. really SinfoníaRx Okay. then That’s helpful. pipeline. And also

that. larger I think there remember I there earn was out if -- was to tied a

we before their progressed with and the that Just could curious has the at be be how of that with was and around about updates time. sort conversations timing any will here of or of that respect year-end sales to if there their pipeline any sort

Brian Adams

to nicely progress with the made to Brian. Hey, Yes, No continue SinfoníaRx announcement yet. Matt, just it's be things pipeline.

an to that we making hopeful year-end. announcement be prior are We will

some are we to and that to going we pretty earn-out could opportunities XXXX that that structured impact still that are note do in material You pretty confident accommodate happen. see order

Matthew Gilmore

one I the and average And of that being Cal missed then below if could. I kind rate national Okay. comment. more mentioned XX% the context readmission had of

So could you repeat our just that benefit? Thanks. for

Calvin Knowlton

Sure.

XX% we been that at transitions using through do software. hospitalization. we where is we year quarters a for company And in-home running program readmission a [ph] the have this have particular information about mitigation plan this care a in and Advisor doing [summary] XX%, And X.X risk the around first was care with We reconciliation large MedWise medication health are for rate rate. transitions pharmacist medication

what forth but the they So we it's of in renewed year will and XXXX it for good already cohort. end a brings the fact have see larger with

So, so good. so far

Operator

you. Thank Jaffray. comes question next from And our Nina Piper line the Deka of with

Your line now open. is

Nina Deka

more I I some was come impact grow of service out And how Would the have and two in know different would into how three. some provide further on us then change we and prepared segments wondering product remarks would the mentioned transition transition the but if three? into you service you EMTM something in we year into only see then year that as year to product see or you detail could segment. and expect a services? something would you to

Brian Adams

this of the -- Nina, in revenues Hi, service of category. all today basically, are Brian. EMTM Basically all is not recognized

be EMTM to next we new the well that of expect to program services some the would we as will following So the as accommodate grow year providing year. in that

Nina Deka

to live And the go are app? members how you mobile consumer, many expecting the did on you say

Calvin Knowlton

are how working members still the our We did establish will it. many what so point, be with go would to partner this percentage live say of to we population not exposed at

Nina Deka

working you you work that about. on type you question then the had was had publishing if you opportunities same see Okay. and in know opioid health opioid been forward. that moving is I have been if that I a Great. updates -- more and on might there And any the And space I wondering have project about population

Calvin Knowlton

nothing activity opioid concrete pipeline to of than have share misuse. the of other domain is We unintentional the there a in

Nina Deka

and ago. more quarters couple that segment you of on one if pharmacist the pharmacy just, could, with had then update discussed And you a

Calvin Knowlton

about given So, there to to Nina, year two. that using EMTM actually of the the going tool are in expose we XX% the are pharmacists be interventions going to to providing be program

as really So year. learn that going we of to are incubator use kind to experience from next an their

Operator

of with from comes you. our next Wells Thank And Stockton line Fargo. the Jamie question

Your line is now open.

Jamie Stockton

EMTM. maybe just more I the of a guess couple on

And see think kind sound somewhere size $X XXX,XXX like guys around you of one, their the doing far some there what like any be us or of you direction I is maybe second there I two one pilots of other are as improvement the know definitely for necessarily magnitude maybe something as whole was that were the does indication you three? year there maybe going sounds any like it about PMPM. that technology. won't First, breadth to Cal of then the can great. but to breadth the of that on of lives year might in thought expand. year you one. of pilot making your it Is services I talking of the and mentioned give would be just are you the It kind adopting population

Brian Adams

Sure, Jamie. the then your questions. I take take Thanks will for is one the will second. first Brian. Cal and This

have We ballpark that to forward, services. an PMPM you will So does year. year put think about for next increase CMMI which some going accommodate revenues that of the as CMS the I give be XX% charging, we we proposal a next in you get approval from into had did of these additional and about for will

that a year. expecting are partner in have into our been next also they told increase enrollment We by XX% going about

we charge well. entire expect population there could to an as So increase the see across as that you PMPM

you that of kind give should ballpark some on So that.

Calvin Knowlton

for from is final CMS funded and two. this everything and final for from our everything a the them week. secondary got while for Jamie. Cal. get This then We that approval takes It to and year did Hi preliminary fully final. week is year receive approval notification We next partner this

have entire sees we allowed another we if six that to it And something someone in are and cross-pollinate are is bring help we to are offering be or the do but this EMTM, allowed as that. that something with will far and program, actually by our there that that programs, not -- been hears As large approached of transitions another do program to, doing they to be their will care some year are we looks understand build year two, that it are what because our for budget already probably, approved model year using And the was but information a to that. that will in doing they information trying be clinical that year and mostly into two like in I three from late two. will

increment we will got it So year two some happen on mostly the that in but XXXX. in

Operator

our next of you. from Chardan Thank Capital Steven comes Markets. line And the question Wardell with

Your line is now open.

Steven Wardell

help the the sell a little care into into selling care over more what and are new you seeking are managed detail, what Can to us products now market you market just you understand managed time? in

Brian Adams

Yes.

Brian. Steve, is So this

right selling care think running. we what we market program I feels are EMTM the now managed like the that into are a looks and lot

care the describing. programs Cal we transitions that addition have was In

nice we a of deploy in we seen the developed terms stratification have well. scoring medication also that that have and risk We can model interest the as risk

to down seeing those right a and fairway for we types managed And amount point. at now of care to those plan now selling so is the population right tremendous because of our technologies the are this services interest continue

Operator

Sparacino the question with of Thank you. our Frank from First final comes Analysis. line And

Your open. line now is

Frank Sparacino

of we end I to is, future Maybe for greater And million running downstream following through guess stratification question. what risk last up engine. revenue. perspective should the than you? Cal, I the the the noted have think think that by year hope I potential that How lives how into translates just a about from that XX wondering am on you you

Calvin Knowlton

a want Brian, will It’s really then process. chime if you I start to Well, in. two-step

by have population adverse of organizations hospitalizations drug now is find and been that events ensue. at their [indiscernible] to risk out certain we many asked re-stratify medication for of to cohorts First, who

we folks digit can that in then we last pharmacists themselves. so or should doing the end our commercial you quarter systems how them mitigate in by low next health or are systems, have to by of our XX in a have either it that million is, the interventions they once be exceed use will it be plans, this that the the to though year, of identified of the done double-digit share, month The have most we And can quite bit so. step we that, And done by risk. plans now. been risk, something high-single do And and at with us the and can the teach that with

So that’s the figure a having of is deep -- large it stratification And risk a kind to the to but into then part problem goes that’s to intervention. very that’s out a dig a blush lift. of it. who first one-on-one is The this, almost heavy down

as So what the as we far I would for are revenue say that’s probably looking on side.

Brian Adams

on might health the at the of it's engaging this services interest might they where types Yes, depending we of on value the you plan these customer, deploy. with really Frank, a and revenue point the on and depending because we the little difficult give varies to kind see of are guidance that offerings, some that

this think of to is But important described, that could were I know You licensing suite what's maybe go our through tool. few fact that the at ago doing to million run note had as the QX earnings call, point around lives been we we when a it from Cal services. had full months just

demonstration a potential can of really pretty a sales significant it's we because real interest had really I nice potential risk and level is. is and think their data that show been from tool the population partners take just their some level have this partners where and we

And so of I think that’s that been process. really helpful enlightening part as and

information give give on months. be able you probably the coming to guidance early bit but little I we a revenue maybe will that So some on to in think you more

Operator

program Thank you the and participating in you Everyone have thank call. you session, does great and does disconnect. Q&A for a conclude and ladies today's and conclude all day. gentlemen that may This today's

Tabula Rasa HealthCare (TRHC) 6 Nov 172017 Q3 Earnings call transcript