TRHC - Earnings call transcript Q2 2022 | Tabula Rasa HealthCare, Inc.

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Operator

Good day and welcome to the Second Quarter 2022 Tabula Rasa HealthCare, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Kevin Dill, General Counsel.

begin. may You

Kevin Dill

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

the our XX-K HealthCare, February For of Rasa our XXXX. additional filed Tabula the on risk section the recording accessible Founder A with risks including XX, filings information is HealthCare. factor call to I’ll facing to Calvin on refer the please over link Chairman the a of Rasa our this of website. Investor Relations turn CEO, Knowlton Dr. of call on Tabula and page through SEC,

Calvin Knowlton

which XX, million, Good delivered $XX.X better thank you, Consistent second ago. XX% you July revenue and pre-announcement a morning, year of on we Thank with than Kevin. for higher joining our us. quarter versus expected was

X,XXX PACE. Trinity our topic non-for-profit as week's part is minute. PACE wanted Brian largest expand existing measured our only Trinity for was continue the Health offering and on XXXX. highlight major who key to population with largest for PACE five-year a such, our led as dependent CMS provides a provider spending. one last and large across giving refocus I contract CareKinesis our services. known and approximately share strategy for and Medicaid for few renewal Medicaid a XX more for of is Pharmacy growth eligible and an announcement of individuals to of care base, execute with of a that the participants is will planned by in and million our this few both a A that in in client of beneficiaries. revenue divestitures is on We company markets further by a to qualify as Medicare models the on Orsula nine than states focus PACE duals segment states This Medicare account dual disproportionate and integrated

XXXX Despite but For truly XX% or data, and represented XXXX eligible such in in XX% example, of based program on about of of as PACE. two federal Medicaid XX% for full expenditures. to actions date, enrollment, policy enrolled individuals an eligible were million state integrated individuals benefit only X accounted Medicaid

over As released report, states. families a a Association serving expand like our PACE Orsula, reminder, the turn on business. to more organizations XX,XXX their fiscal year XXXX call annual I who community in of in would to its PACE recently PACE and now XX than the XXX individuals cited National will

Orsula Knowlton

Thank hosted event. you. Summit. Advisory key two takeaways CareVention we In like to I'd from early our fourth June, Annual highlight HealthCare this

from demand personalized or medicine PACE. a there First, is growing moving PGX pharmacogenomics in in testing to through precision

growing number consults participants. for of of half tests began and PACE first to the XXXX, During we a deliver

the PACE there startup years. exciting level is two in to of program an open Second, projected next

home outside an have of won increasing plan new who requests state their to have expand number partners state of We for and already PACE applications.

growth. our CareVention sales that we ability to it Given revenue within our by this feel to win confident and outcomes future our note growth in XX% organic is documented quarter publications, footprint proven Also, existing opportunities. in peer-reviewed remains important driven

today. noted, Cal population ahead states market across PACE are us existing the penetration PACE programs the there XX growth eligible with the of rates given significant among low As

the federal is for supports bipartisan Finally, recent positive for development. we as Individuals efforts] XXXX legislation XX. options, July of view offer including stages, with week eligible and to Care existing potential PACE new explore million flurry three they need example interest now. the delivers care a seven their right up in grow [ph] Rasa TRHC This growing Congress to U.S. legislative Dual opportunities integrated titled start aiming dual most coordinated delivering a last Eligible future relies This Comprehensive and Act services that continue the in of distinct these of individuals ones. funding clients bills on bill introduced $XX Tabula At [think state. per The as on active pace The integrated, state our to activity journey. to potential heightened care programs build adds or programs and to market of variety pace

and messaging, will integrated these paid end refresh we services completed the how this and We by XXXX. of be are our sell branding, simplifying

Our even easier more adapt, to integrate. solution to will become accessible, and

to I'd it Brian. like turn to Now, over

Brian Adams

Thank you, Orsula.

behind Sinfonía, well focused MedWise positioning our as PrescribeWellness DoseMe, planned on simultaneous multi-drug and in XXXX. of us, tool remaining we growth decision as sale are the for clinical the With divestitures support of

that of strategic around represents We care. and outside ability the to the on systems, pharmacy our I networks at total details clients provider retail addresses a including reduce of cost our announcement important have highlighted relationship TDS' of which of we quarters. part further offer the Science to The quarter, As coming one XX, base organizations, this revenue of plan our part value to largest where the profitability. the MedWise a through share TDS that partnership June as population refine are we in the solid in management clients to risk recent of provider Cal latter went pharmacy the PACE, Last signed country. national existing compelling ROI were our today investment we or This of largest represents at millions validate our of represent worked Earlier, XX%. today live by And dual risk or complex provider on in that prospect. organizations return chronic individuals we the future with large individuals to and months, second the management of the MedWise a the that percentage condition TRHC In existing model majority ROI eligible cited proposition half XXXX. roughly of clients. also participants recently of presented served a have analysis

Jersey risk perform populations Our our services members both center. reviews high commercial call through medication their include identifying sponsored government and to New across safety

running alerts we're medication addition, that program a and gaps. medication safety, surveillance around In care adherence, medication related medication provides

numerous to able I at ranging confidence ROI to this MedWise with turn we're deliver from one a strengthens our going other with engagements, an now will where and to ROI Tom. Our success risk in client over to three four it guarantee.

Tom Cancro

everyone. morning, focus areas: quarter to on Thank results, I'd you, like second my our balance sheet, Brian, three and comments and good guidance.

versus Second XX% ago, sequential quarter on basis of increased year XXXX. XX.X X% a versus and first revenue a of the quarter million

versus and first the performance to PACE of in a revenue in year all, our XX% of versus attributable sequential growth onboarding of a growth resulted a XX% versus accelerating this million enrollment growth new on In Our XX range XXXX. product guidance the large and million pace XX quarter of ago revenue to was client basis California.

progress professional the rising levels, year normalize expect quarter. or basis Adjusted X basis, in XXXX. we a quarter Sinfonía in versus and year quarter a during this year revenue resulted Gross operating on as our with are by continued made expect product Excluding revenue, the from first a including points the ongoing higher are year million additional of down the EMTM, X% network sale well towards few product improved XX% planned ago, the XX% structure of higher facing second to XX.X% the versus improvement and XX% the and but sequential and a prices, increased ago first we Within costs margin fuel XXXX. versus and that year ago major quarter divestitures versus mix continuing DoseMe. CPN to elevated is but Within drivers. by XX as shipping which PBM cost driven revenue, quarter the coming EBITDA X.X change versus due service distribution There wellness million in We of a a of operations increased are headwinds reducing [indiscernible] fees community in ago, services, and higher expenses prescribed in is nearly consulting in from meaningful transition pharmacy the the during BPO of of down X.X revenue services. million service expense quarters.

million, and in decrease quarter, G&A and XX.X a totaled versus decrease on aggregate and versus During of the a year the first of basis a a quarter sequential ago of XX% marketing X% R&D, XXXX. second sales

sustained XXXX. XX, million XX.X is free ended on producing than cash second heading which We March to We higher the with cash. XX.X into to basis remain XXXX. Moving flow a of positive million cash, committed quarter

closing liability loan prescribed we line which the of side totaled balance to XX.X XX, Turning existing credit, of sale, sheet, immediately of as the million our paid June down upon XXXX. the to

convertible now in maturing XXXX. debt solely Our is our bonds

continuing for operations. guidance to turning Now,

of XXXX $XX.X Healthcare represents XX% XX%, million million, CareVention XX%. are quarter [ph] as which to growth including to third We [up] to follows: introducing revenue guidance $XX growth Revenue X% of

of growth. XX% our revenue the the EMTM, midpoint for Excluding represent quarter guidance would third

range including new With represents a our to million, continuing X XX% to Healthcare of growth higher CareVention operator raising to XX%. the which guidance. is XXX Q&A. prior for to of I full-year on For XXXX, than XX% midpoint our the million range million turn guidance operations of that, growth to will our are XX%, we revenue it XXX back of The of

Operator

with [Operator Instructions] Sean Dodge comes question Our RBC. first from

Your open. line is

Thomas Keller

same that was extension can And this to any or Thomas Thanks bad or PACE, on is contract off want was question. on? Sean. basis any start pricing there comment This on with morning. along simple was in taking expansion with there on good that I Health recent it? a store change extension Trinity Hey, to the that a Keller related went for good the cross-selling or for you

Orsula Knowlton

Good Health morning, we Thomas. This we Yes, is company. actually been the have with Trinity partnering started since Orsula.

and they on tremendous are a seeing positive extremely we’re investment. return So, their

to pricing. any did for likely old, were no our change programs which relevant winning include nothing So, will also up that's that be the a few except partner from can really be services. new they the them, starting, we Louisiana, added areas, they'll in areas, Western [indiscernible] there contract in expanded all clean that and in we Florida some perspective, you that And with Maryland, to

Thomas Keller

free flow, you to guys Thanks, to full-year XXXX, Orsula. on then, And guess needs if great. are positive the I what to Okay, happen end guess I get there? I cash so, for guess cash flow expecting and

Tom Cancro

this Yes. Tom. is Hi,

slightly For the the first of right. negative, was well, half the year full-year,

negative, quarter is First is second quarter positive.

I believe the So, guess entirety answered from of that, of I you've will this is half year, way positive. we got but out the last to over I'd way, be the the dig

We have to positive that positive quarter adjusted flows or EBITDA. any one ebbs is, working remember and there's make thing in capital The can negative.

in can't to whether can of you too, we that the the January So, the are control flat [ph] year. really to over and comes half December X, or but positive XX receivable [going directionally, influence ever second it be]

Thomas Keller

it. Appreciate Understood. me. right. That's All all Thank you. from

Orsula Knowlton

you. Thank

Operator

Our William next from Jared question with Blair. Haase comes

is line Your open.

Jared Haase

Yes. the Hi, on one morning maybe questions. good just of for ask point I the taking guess thanks on should interpret a and guidance how I things. I and clarification wanted to

a out will, I driven than favorability was rest contributed favorable on – it on lot trends] fairly maybe kind sounds that [census in a year, basis. sort PACE a the increased of was at quarter, look of of that implying when flat [ph] second a sequential kind sequential and look revenue So, the in was of like of QX I little modest like at if and the basis QX, but looks to run outperformance more it only you're in expected, the that increase for by to guidance, a which

interpret how we puts any curious be takes of guess in market services other as overlooking? just the that I second of sort year that versus and the So, just half much might should I

Tom Cancro

second It's the half this the year. No, Tom. of is I up slightly in – mean

out modeled sequential our and in there it's some consistent X.X% So, is growth the growth with we rate. there

Jared Haase

rate, kind you census of like guess your then look see and growing market if press market, a years, and fairly a PMPM of, rate PMPM couple I to think the of lot the for I were balanced should forward enough. the looking for quarter, we it of from the kind the overall the both disclosures by PACE see do X%, upsell and at follow-up, the like census ability – the so and I PMTMs. growth mix with the obviously of have levers Fair growth business a similar to the up looks of growth just both rate. Okay. know then next sort just relative sort enrollment grow you over between have sales feel of contribution I kind obviously opportunity I you quick as in of to guess even was

I should we longer-term? drivers more two So, those about guess how think between balance just, broadly the

Brian Adams

Hi both I is you're question. future the Jared, average of this do of is the in Thanks think reflective really the a years, continue PMPM Brian. to base. going continued within cross-sell for to growth pretty customer throughout uptick balanced see those the the that

to So, growth play evidence our out average of that in and is that our of PMPM. see part we continue strategy

part growth going a pretty So, we the of be that's do balanced believe to future that our years. in

Jared Haase

and questions in hop back I'll my taking the queue. for Thanks Okay.

Operator

next question from Jessica Our comes with Piper Sandler. Tassan

open. is line Your

Jessica Tassan

of your incongruent hoping of to with questions. appreciate taking you on through, can undertake this, kind extent for much the just of you and the of it. just recent control? [activist] comment intentions what was just, the to to can goals guys managements I so dilute you Thanks. walk led are, Thank the [ph] us Hi. you kind filed that kind where I actions

Tom Cancro

know don't know that this activists. is don't the Tom, that by I our with inconsistent actions Well, I way. are – the our

what plan, and rights which to our thing shareholder matter. the we I not on back have. guess to all that that feedback specifically go but as lot far we take companies is, a going of pretty to shareholders, As encourage that's comment quarter, we I'd last we're investor said common of

Jessica Tassan

you. that just what then of for you're per per you're member And PACE might us, for member be what can renewing assets? how kind terms divested you're trending seeing excluding you remind of a it. the Thank the in level maximum expanding just or got the Okay, then month XXXX? and contracts And in that

Brian Adams

of what maximum about we're but perspective. in comment sign for I'm to happy today. seeing up terms we're to just if the what PMPM, to start on amount. it PMPM, all the on comment to Orsula from services of Maybe turn I'll were renewal seeing $X,XXX is a somebody specifically our

Orsula Knowlton

higher. our Absolutely. for particular And of the close of this so able renew of retention value stratification with risk mitigation the opportunity has services ongoingly. in to to year that really been seen our ones an had the that and we've We’ve using or renewal acquisition been of us Pharmastar engine. risk XX% excellent share far anticipate to definitely that We've XXX% client

So, we're more opportunities deals. seeing close to

So, we Thank continue will the believe on that to average. increase you, Jessica.

Jessica Tassan

Thank one but on I the Thank software mentioned or it's that, you be you. I follow-up. That's you quick sale remind retail, into could helpful? helpful. think Can just elaborate I on and if elaborate CBS recent just you CBS? guess that that have contracts with a would you. guys signed you

Brian Adams

transaction TDS happy to Sure. where the well really Brian. I'm This that take is they about the beyond just business. PrescribeWellness partnership We're that. with excited acquired goes

through to to their network. see services provide opportunity continue clinical an We

our used we future licensing to be pharmacy risk installed clinical as support will be our to number tools customers. they across of to MedWise And well base. their going payer the decision support be that hope our we're today, leveraging network in so a And scores, that as

So, it's think for really exciting a both opportunity companies. I

Jessica Tassan

Got again. it. Thanks

Orsula Knowlton

for Jessica. Thanks your questions,

Operator

[Operator from Instructions] with David comes Our next Grossman Stifel. question

open. is line Your

David Grossman

if balance and been XX have and pro should you proceeds assuming at forma been Can Thank [X/XX] when cash paid [ph] to go million have after we and balance down? has sheet taxes transaction you. what the would net for done all looked it debt whatever just Tom, to back of the you want it's to has fees share use completed or the your burn. about like the comments sheet just us Good or and morning. what I all with said

Tom Cancro

Sure, morning, and David. good

that close So, the that cash the another proceeds million. come on you in as $XX were know, out future. million $XXX There is, – may earn in come will

XX.X. the friction down Some million] revolver, [$XXX that costs right, take XX and on almost then about to [ph]

proceeds, a bit net your [ph] over June million So, transaction, XX. the had little [XX-ish at cash] we from you $XX if will,

that's June by So is be it would where $XX XX million cash a forma, little under and exactly pro your way. the today position

David Grossman

And of after balance the the the piece transaction was or include does of that end the quarter? part the payment that for technology the sheet was

Tom Cancro

No, does it that. include

David Grossman

balance That's [ph] reflected [X/XX] the sheet? in

Tom Cancro

sir. Yes,

you. Okay. Thank

David Grossman

in back And cash breakeven it then of it collections, call etcetera. modestly the year, of like on depending sounds burn positive the half comments, the to on timing

cash if So, ops or if businesses? correct? that is that assume material And we there is it well, from a – I of either discontinued includes the contribution as burn does, those

Tom Cancro

it. I'm really a glad and point you raised That's good

of is the a cash close year Some sale. going the Sinfonía the timing half second at the depend to result of the of of of from

that is flow slightly PrescribeWellness generated remember in of cash and negative. a cash, Sinfonía So, bit some quarters

with short-term get XX lose balance and that we've that] you then debt So, PrescribeWellness sheet gone, that but a liquidity [ph]. rate benefits environment, in to cash of that the de-levered of expensive sale million the through on the and [inflow our starting was floating got our solve issues,

balance how these a one year close flow So, we a And that thing Sinfonía quarter. cash cash to the off to sheet, really is your But take in depending on get have fourth far you see starts could the I improve think into once the little negative structure your any quarter, goes, you all to ability synergy cost of flowing. exit then shape. assets key

from You're the than that's the employees when talking X,XXX less at direct of And the about cost. year to just X,XXX closes. start going Sinfonía

scale should push the legal are cost Things real services last headcount, in estate, insurance, about organization. indirect can of a other As all smaller like we business areas with that that call, fees, to there's the tied talked savings on. we

the that's savings that. start really impact your adjusted you that, is will haven't a we timing know of timing impact projected on the month can to a of the close from when Sinfonía cash our in flow. one And have three-month greatly reason we'll or quarter the any ability So, real EBITDA see

you quarter quarter, if of versus can big So, first close month impact. of a have the in the it the third the month

David Grossman

magnitude what And can you for? of just of Sinfonía’s dimension sense rough the of what it's a burn at kind all, cash us is, give

Tom Cancro

or think flattish. then million it it million. it Oh, quarters average, where On averages X.X probably quarters so million X to roughly was I was where $X were there and

David Grossman

Got it.

Okay.

Tom Cancro

a Maybe [bit more] [ph]. little

David Grossman

asked installed was Brian the think give to I Right. within question And guess, base are to renewals they the, your today isn't some idea trending really then that probably took what looking back kind sense going of like? used and just installed within for Orsula, you average the that is but the the PACE, way how base everything, your to last and I earlier guess an about And $X,XXX, has been of can right PMPM then, of over the so years? us TAM couple it, I ask average a what just renewals

Orsula Knowlton

Well, the since we've above year started company. been we're we trending XX% renewal. a Last XXX%

expect we well. to as be close year So, to this very that

David Grossman

question I maybe No, sorry, very actually – wasn't clear. I'm the

I – the curious you $X,XXX I an us that said if got a if $X,XXX? And been giving number that right. I how idea was that vis-à-vis Just think all that base – the services, just has said – Brian within think client installed trending the you that took

Brian Adams

$XXX, No, at was an that $XXX QX, David only if annual we disclosed about But it you basis. on PMPM. look

that for very the significant us X% there about up runway was there's prior year. a and still So, over

see growth to continue trajectory. similar So, we

David Grossman

what getting X% historically, that been is Brian? you've And

Brian Adams

Yes, to it. way I think that's think a about fair

David Grossman

ago, the if I grants], one were read you a that, have those, I of saw explain couple [RFU filed, not is of by can days way. may maybe – that last the correctly, Form-Xs guess, And context I just the that Great. question. the

the question, that you one what is of just review those kind of I'm which So, asking Thanks. quickly? just if could were a reasons

Brian Adams

the one. this related Yes, for to officers. that is named take That XXXX the Brian. I'll was incentive long-term executive grants

granted had not those date. So, been to

the those are much relates year. earlier granted in what that's So, that Typically, to.

just grants happened. those So

David Grossman

relate grants XXXX? those Does to

Brian Adams

No. The XXXX long-term incentive.

David Grossman

see. I

Okay, great. Thanks much. very

Orsula Knowlton

you. Thank

Operator

disconnect. this questions further you and time. participation. you a at conclude program are Thank your may does great no day. Everyone now the have This for There

Tabula Rasa HealthCare (TRHC) 5 Aug 222022 Q2 Earnings call transcript