TLMD - Earnings call transcript Q3 2021

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Operator

Good morning and welcome to SOC Telemed's Third Quarter 2021 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Steve Rubis, Vice President of Investor Relations. ahead. go Please

Steve Rubis

results detailing morning call. news Good SOC you today joining of this the With of results for is business will quarter Thank we and me company will are website. also Dr. results Interim business be on Chris provide of company's today's and David this release conference a financial review available A the Gallagher, Chief on call Telemed's website. Today well Executive on the replay XXXX. is provide our financial these second website. The A results as will you. website. well the the as Officer, call, as will Chief replay the thank call for call and an Telemed Fletcher, of on an company's archived available update David The SOC review for On Financial the third on these as of the update of quarter be Officer. XXXX. company archived also Chris on detailing news release on

most these discussing measures press call, differ evaluating page today's those forward-looking factors to found actual release Details note be believe on implied Investor call between this a subject company from posted the Such website. will the as are could financial be the and statements GAAP XXXX. statements Reform by during Telemed for comparable performance. uncertainties, Relations call. SOC other reconciliation of will Securities non-GAAP or and forward-looking thereof the Also, conference please risks, can relationship Litigation the that During of important to measures results cause the the in Act materially that to measure made in certain expressed in defined statements certain on that Private we non-GAAP be that is company's are

are the over available please the I with SEC, page Relations' on press the which of information, now Chris. all release the cautionary company's the call refer turn the to additional and filings of Investor For to website. statements in will

Chris Gallagher

Good you, our joining and on greater to morning. everyone CFO, to quarter David our detail Fletcher, provide will earnings Steve. today. you am on Thank provide operating performance. call And pleased an performance. update Interim our I thank third our financial

Before efforts update I turning and to our the call David, like our would performance. provide over of third overview our strategy, to quarter restructuring an an go-forward on

goal is services. optimized the Our through maintain care our leading clinical to telemedicine as technology-enabled position grow provider and our acute

we identified As focus. we think forward, have about of four moving areas the objectives company's key

services. and First integrating the legacy is Physicians Access SOC clinical

is in areas Second, programs bringing all Telemed development of the focus going telemedicine to specific forward Access very on IQ cart. standardizing

generation newly Third that the customer apply quarters. believe areas drive cross the lead successful over margin, opportunities will the for refocusing focus EBITDA most continued is to and integrated reps go-to-market broadly We on in across bookings sales gross coming force growth, and the service revenue actions growth, opportunities. sell and is processes these improvements across

growth, and XX% activity XXX% quarter service million, volumes million, diversity. year-over-year, on and position. Consult by a XX% our revenue $X as $XX.X bookings focus Bookings improved execution. areas achieve focus third growing key Our led growing we strong resiliency line growth, increased grew liquidity demonstrating cross illustrate on totaled Revenues sell by totaled three results year-over-year, driven year-over-year.

cash down SLR our position. agreement, of our results from renegotiate enabled the $XX.X improve liquidity the to an have million credit will as Improved us terms allowed performance quarter drawn us the agreement credit regarding operating with SLR. additional David details position Fletcher provide and to we third further Our company's

in remains of beginning a transformation third which The companywide the quarter was process.

clients, nearly XX our days been providers period as to our a has role of employees. I've this sessions, just in-depth into learning our the Now, and CEO, held XX listening over of feedback

While generated and enormous solid a third quarter of disruption, working results. resiliency change and demonstrated company through the period

identified of September, the call The introductory and in key implementation expected two our non-clinical result plans organization of areas investors XX%. revenue is focus to of – efficiency with these headcount accelerating in During roughly growth. we reduction across driving the greater

We expect between an savings on million in and starting $X cost million these XXXX efforts. annualized associated with $X basis

hospitals' shared Our intense organization. through technology. now with We corporate experience organization service clinical deliver XX focus as carts. and and proprietary complex market This via telemedicine a clinical two focused solve service on IQ challenges, care shortages, lens, transfer settings physician patients and The eliminating Telemed the lines an including the to staff resources, opportunity restructuring patient, refocuses to an department emergency acuity inpatient clinical technology-enabled the to allows keeping organization common process and addressing a Such on restructuring us platform provider approaches their local. most high both areas. primary and the our need medical optimizing through

a structure. through efficient and to management flatter First, aim we more operational performance improve

of across successful the to company. our future are Second, practices. around to steps we strategies the legacy most improving each identified operations the transformation first organization These best guide the

the process, Telemed around as and consult conducted analysis and process, included privileging best identified sales the in Physicians revolves analysis across strengths the Access restructuring enterprise-wide we The programs credentialing, SOC IQ practices the management. cycle and the neurology an both legacy platform. strength management systems. During process gross of the cart process, within staffing organizations. emergent legacy revenue licensing well as and margin technology

several systems next the and thoughtfully and processes. diligently spend integrating quarters these will We

as of is organization. services the second of and the our driver a restructuring plan process company revenue bookings The Telemed. accelerate clinical SOC to tech-enabled growth is at objective important a building repositioning An

We most key clinical culture that solutions when clinical and are by believe supported our In a response, provider shortages. we we Our clinically-focused technology. successful lead to clients growth. organizational establishing our challenges with accelerating face is

strategy go-to-market an is component growth. and bookings driving revenue important Our of

restructuring evaluating significant as the time spent of legacy management part our As organizations. efforts, a sales we team

changes guiding post as operated two the performance best our go-to-market we between parallel the few highlighting legacy data go-to-market processes. There direction, worth regarding organizations. details implementing the sales will companies begin data We months two the in seven are that a have that With of observational illustrate acquisition.

The first sales meet the difference proposals client in team the needs. flexibility to service afforded to is

make While Historically, look and represents align service same resources each hospital legacy very flexible hospital clinical Access Legacy Physicians client to to with the and needs. culture. on paper, specific process each workflows an needs, unique a the be with adaptable opportunity may in ability neurology customer operations, consults tailoring more sales exhibited the larger rigid SOC workflow. neurology and to platform especially a technology-enabled attractive clinical services a organization, focused in emergent emergency on across will flexibility psychiatry of service was hospitals. resulting primarily within department, psychiatry and number the the more in emergent delivering Improving our lines,

the sales The of subject technology. Integrating clinical improve the sales outcomes all subject second the matter into strategically a appropriately process. experts sales clinical Hospital require approach of opportunities sales experts scope and services to is matter differentiation throughout opportunities sophisticated over point design through inclusion term. clinical should long

forward, upsell take to the points convert clients, throughout our the new most clients hospitals. Going opportunity only sell endeavor touch to and but important drive of believe cart to single existing every will organization cross represents proprietary also not that We one to the carts.

client the time. access In added possibility from Our additions clients we retention cross several analysis current show another a to service third over point over which dialogue several approach benefited and selling clients, of line carts build greater opportunities. our the and offer proprietary provide increasing technology from quarter, agnostic new with that potential and

strength ahead and programs collaboration an quarter OBHG's areas with Our performance including neurology, critical exhibited bookings go-to-market offering in to health – OBHG Hospitalist currently medicine be telemedicine of momentum SOC displayed the September, lens OB Hospitalist medicine. expansions, claims. medicine assess in share strategy encouraged hospitalists, of claim multisite midst and upsell. focuses sites service third quarter, emergency exhibited OB bookings four on where SOC Telemed current payer The expand experts. care, programs. all to believe The curve. expansions medical OB the X% Medical adoption maternal In to and stand the the announced cross growth provides Current share leading organization Group clients, will telemedicine maternal quarter change. and estimates I'm mainstream we in us. between the the third psychiatry and multi-specialty even on fetal closing, combined new Hospitalist/tele by organizational unique sell illustrates and opportunity of multi-year lines showed in additional roughly We adoption execution hospital a during the the enterprise combining telemedicine Service the illustrates fetal claims a data Telemed nationwide. waiting In

telemedicine opportunity. future team agile updates represents to to Chief as will Mikula over David look as and on to a Chief beginning forward call Financial in Officer Our I execution the management and now Interim new in on David place Operating quarters. execute better David. the with our organization Fletcher Officer. SOC Telemed is our resilient providing We our turn

David Fletcher

I Thank of were of results will and across well financials. restructuring executed as the quarterly pleased provide our the and with our we will strength quarter are you, Chris. revenue of organization the start quarter our more detailed I in an detail. pleased results. results then third discuss third overview with a walkthrough bookings. Overall, with We our

our Another ability liquidity. key achievement balance was improve sheet to the

Importantly, and we enterprise-wide undergoing were review able despite well reorganization. to execute an

result non-workforce expected complexity. identified non-workforce of We're improving in be to productivity our and the in plan further through aimed remarks, The the costs end XXXX executed physicians. end implementation his the of prepared expected workforce majority by be fully cost completed reductions at the headcount XX to company reorganization the roughly of the reductions reduce in non-clinical are activities initiating reduction XX% Chris by described completed is XXXX. operating As A expected enterprise-wide reductions. reducing are review to also of and to completed The cost XXXX. of or

cost in Additionally, generate savings are associated expected starting cost restructuring million our to million in between savings and with annualized $X $X XXXX.

incur to costs, $X million in million in termination restructuring consisting expect disposal closure exit and roughly $X approximately other and severance and site costs. and million of in benefits We $X

$XX.X Physicians, third addition volumes in COVID surge hospitalists, by as client impacted and implementations, the and infectious consult revenues new new the the in Access growth critical pulmonary the disease were XX% neurology. million, positively up core year-over-year, clients care, driven For quarter, of

of in $X our are company $X.X of given our helped ahead the year-over-year. business. offset revenue million, to the contributed XX neurology COVID Access latest more care performance we diverse much quarter. Bookings inpatient downside in up the million side of lines surge, service emergent on focus heavy came Overall, While revenue a forecast. in emergent and our the Physicians XXX% were dropped

opportunities, bookings strength Access the by by Physicians XXX,XXX, and benefited more the Our service cross up line were in consults driven market. Total offering a primarily performance to approximately driven systemwide sell year-over-year, from extensive neurology, XX% forma driven acquisition. well in primarily year-over-year, grew better-than-expected and basis, hospitalists disease. in as a psychiatry strengthen XX% as care, consults critical On infectious pro total emergent and by volumes pulmonary systemwide

and IQ a consults consults XX,XXX, standalone as well total as the up reminder, services totaled platform. include systemwide consults Systemwide managed core both core approximately year-over-year. Access As Physicians, consults XXX% from SOC Telemed at

of as in panel reminder, growth consult we infectious the those a and performed attributed physicians. define and and As be as disease. care, our across Strong strengthen critical by primarily psychiatry to core consults emergent acquisition as better-than-expected pulmonary core and consults hospitalists can neurology, volumes well volume

the call, Coming would Our prior the given consult took legacy totaled approximately there service the in quarter COVID approach to Physicians the in COVID was conservative that a wave psychiatry. quarter, volume a quarter In core of related while volumes the earnings second quarter. from drop drops quarter, forecast emergent SOC emergent as of be to Telemed not down Access increases throughout consults the end prior flat counterbalance out related consult COVID improved COVID the core consults standalone contributed XX,XXX, assuming inpatient third lines second SOC Unlike the in business. in waves, XX,XXX neurology. the impacts our

business. we for and operating management the review year, plan will best next select describe As the those that metrics key operating

in million rapid increase increased in Our adjusted primarily physician Adjusted increase specifically related XX% the results associated volumes by investments with margin compared experienced payments and impacted hospitalists Access SLR ended a including of go-to-market cash in $XX was functions, on infectious EBITDA the costs the as Access top a Adjusted year versus added results, $XX Physicians. public loss accelerate operating with our to credit Physicians stock-based further third margin in million to several the debt facility of gross was quarter and an acquisition gross of in the third as SOC ago. XXXX. The an we to service sheet. psychiatry. million increase of well company volumes, consult We to we for improved expenses $X.X agreement In loss modify volatility lines, and a being was the additional compensation, position. in Operating in we year bolster term were these SLR our $XX.X takedown quarter the negatively from pulmonology, Due quarter able down cash $X.X the incentive liquidity to $XX.X of million ago. terms November, of versus in million a disease the the XX% from million expenses funds. were to pulled the line balance

Given our raise contributing are revenue Currently, we Physicians million year our $XX.X guidance. the performance, to we million XXXX the be Access roughly third full-year between with to expect of XX% XXXX strength XXXX revenue. and of quarter operating full full-year opportunity taking GAAP $XX.X

million. of $XX.X EBITDA adjusted an million $XX.X and generate to expect loss We between

not the provide specific longer-term in the and acquisition do Physicians the bookings, on positive guidance we Access remain business. on While growth we

like our the to to over additional significant to as around considerations to we as year. efforts, team the on optimization integration and the next enterprise-wide two provide businesses Due would focus sales time our well we team clinical dedicate of will integration some guidance. Finally, need the

ability on adoption. in detailed growth We fiscal optimistic the significant in innings which remain year call. our quarter early care XXXX the acute the provide very financial We telemedicine, remains fourth and execute of guidance opportunity on will acceptance about more to

open you. points acute to line scale operator, positioned Thank for please we our access the well solve clients hospital to questions. are As help the in And care. player telemedicine, care acute friction around

Operator

[Operator Instructions].

first The Blair. Ryan comes Daniels question William with from

Nicholas Spiekhout

your I first Chris. The your just remarks. And I on wondering the in was be forward? prepared the can expand vision of why to one's if that company for going laid opportunity you going you guess excited overall you are about out

Chris Gallagher

terms look long the in the and of both we near term. can at think of future and I vision term company,

growth I That's nation's excited the what hospital. care is our us point within acute at we're term, hospital clinical term, which services care think four strength most is sales near large delivered a excitement. and we're the our an encouragement And today, to systems. strong key tech-enabled gives mission about of considerable same store a And within building be the walls incredible part those that telemedicine, is of. services organization. the Long of

those the we're seeing acutely expansion hospital. transition outside So ill patients. four over But of the patients for we're the in for most caring a sickest, of an time, to being cared walls

and the So, the patients acutely building the not but care only knowing for very the we're four for sick, highly ill outside of today transitioning hospital, walls. inside that building of

think areas I excited. are those where very we're

Nicholas Spiekhout

clients year I year, ED the chains we've wondering a that lot for acute volumes just and meant what these rebound guess that recent seeing been of in you report far. over with your so in I'm

Chris Gallagher

think also, business. volumes we emergency when where emergency organization work neurology is department uptick our a place department, in amount favorable an But and both our As admissions the psychiatry key emergency emergent in our busy service lead serve, considerable of the with takes emergency to to the so about lines, a the that also source inpatient side admission. busy of and other we of department is hospitals to the ERs business

well. So, more admissions as but care being is emergency clients into to hospitals, for keep our also inpatient able as help both our as in patients, business, well to care local, care that translates setting for our good the

Nicholas Spiekhout

the restructuring. on one Last

not Just impacting costs front to on wondering how burn, reduce your tech you leadership and balance the and the cash need or development. but growth

Chris Gallagher

negatively the was while burn reduce there the cost focus reorganization, growth execute structure, impacting the on spend our were really the without given we And right-sizing ensure entire The ability look business. opportunities at significant rate, to to of cash Ryan, opportunities. to the

great at confident we and So, about that the detail future. looked in

Operator

Jailendra next The Singh Suisse. with comes question Credit from

Jailendra Singh

an XX% overall on? follow-up actually headcount why and labor Any that do are of sure very think are Can question little market would which on specific always not right where the the I non-clinical overall? want in efficiency restructuring where a How to areas this make decisions reductions more productivity, these includes environment the planning, general move? of is bit labor service already on these that is thoughts was last in client tough, tight, terms side. impacted? you understand you reduction focused tight headcount be but the I you on on market

Chris Gallagher

that we organization. the review, As plan through meetings Jailendra, and of could right-size advisors, clinicians, underperformance appropriately right really the we the to employee our clients, where areas our we conducted we identifying as base well went sure with to make our is identifying areas third-party also as were develop

we reviewing was to of it the kind the forward. stakeholders so, grow any to business different without of diligent going remove with function process doing structure that ensure to a multiple in could areas expense harm And very ability

I think labor that do the tight. we market is recognize

there, kind and your current flexible best future of we that be And experience and strongly we need to employees last so, possible, the can believe we answer question employees to so to competitive. work create remain to our our

Jailendra Singh

there and color of some near physician physicians. third in are margin impact payments And pressure much would of change? proactive much from taking points offset gross How of this terms pressure is gross technology term? the these of pressure even you margin like say of steps for incentive Thanks temporary? to continue terms any leveraging some higher is even structural if How party or availability these lack of vendors in in you the

Chris Gallagher

operate as clinical unified those clinical term. a volume the margins into gross have give assure we integrate to we we pulling that which I based, levers parts opportunity forward area business, business, margin in margin. will the gross specialty gross on are can two so that adjust going of clinical different globally volatility An we clinical do two that think terms operate the And beginning in focus forward. two and practice services. to going there's to that optimize business process In models saw, further the to short improve are for to immediate models us us We there of enormous the surges in is integrate. unify, is those that the of more then we

Operator

with The Vikram question Kesavabhotla from comes next Baird.

Vikram Kesavabhotla

$X the And I savings to that to on to of reinvestment initial follow-up to should of $X million a as or as restructuring. $X a expect identified, all that, of you've a savings thinking expect you've the that we should of this one could pretty $X actions first, list through we immediate the from about comprehensive that flow is million going EBITDA first guess, be savings to forward? to Or million of process cost guess, My down is some the we should road? this your perspective, an phase then, I million more identified? lead

David Fletcher

reductions. we're those From the Obviously, and through to million perspective, only reduction, the an very that starting we The to to fourth continue benefit translate quarter, not going improvement of year realize in nonXworkforce savings. company feel We about go did comprehensive but full EBITDA execute into $X look expect enterprise-wide at but million workforce numbers continuous XXXX. $X looked to of and a on further a through review the strategy will in confident opportunities. savings those fiscal at continue improvement very to

Vikram Kesavabhotla

you impact for us the some My has the just contemplated different guidance? balance give pandemic service follow color of on here offer. an we're in lines to Thanks, the around respect backdrop – up the it on trends more that Could year still is you've you your how the evolving utilization and with obviously, in

Chris Gallagher

that's but that been One, Not into two to been, a in upturned we at on very ripple well take influenza established and cadence the I only months. historical has there's itself, variation seasonal clearly COVID. COVID effects have things its play in by think, winter Vikram, healthcare that account. there's

then COVID in with models in into a how we're And have the conservative assumptions taking better impacts on clients, at of forward our very looking business. So, a also, terms waves of the of existing our approach in for we utilization, of business flu I going we're very light season. think terms insights

four to terms can patterns COVID of been cases, do in having begin see we begin uptick an so, as And if now as a well. through we result of waves, to that we have model

the lighter of think we'll our overall, looking existing CDC at going I be impacts So, COVID then, watch approach. the business. contemplating seems season business And That's more terms flu forward. a data conservative to in

that of business, terms continue new we'll vigor. pursue with to In

Operator

The next Dodge question comes Sean with RBC Capital from Markets.

Sean Dodge

quantify maybe of utilization, challenge just tailwind step your little quarters pandemic on It by sounds at think basis, the still can I alone? bit how There get there's COVID back a proving if you do take of ways be a some few the a to is do comments lines, is staying much the of bit a we affecting. guess, Maybe on service in made? you you just revenue? you others. are a think you help and weighing in How little kind can coming normalization look over much different a kind still consolidated lift a on of

Chris Gallagher

think XX more will offer health lines operate a able care. COVID in settings, emergency of of the our more I on now diversified COVID organization on department both as that impact impacts inpatient the the to company mirror the within service broader

were in we to a there was wave QX, terms a in the deal We that, more going with forward, think COVID than impacts more net-net, patients. I expected. saw of so, with And impact able favorable

over think don't to data accurately together, yet, have data obviously going more performance on Sean, the able new favorable disruption we'll again, our impacted so organization, more So, be more diversified, two healthcare, we're, I in that say to the If are of healthcare but and impact overall more an service leads will enough coming environmental how given forward, there's organizations exact within that change or lines less going put in To learn negatively to volume it, numbers think coming be we the by diversity. given the specific change any gather to I organization environment the that the forward. are quarters.

Sean Dodge

two guess, doing Or bases? clients, quarters sessions months of how as in the could been some through work I catalyze potentially customer health your churn you issues the some You been or ahead? client those, of attrition with the you characterize there Have any mentioned that experienced would service have listening all you've the any that restructuring?

Chris Gallagher

churn We of have not as change. experienced any a undue the result

It's positive In as opportunities. our new clients. from fact, it's actually unlocked been received

some that doors providing the in closed organization been refocus on have clinical as actually And have past we reopened solutions. tech-enabled the

So, those see have base. continue within our And conversations great. been to we expansion client

Sean Dodge

congratulations in on the the quarter. progress

Operator

comes The Benchmark Bill from next with Company. Sutherland The question

William Sutherland

the of On sales able to just be force, the to now where can come? and you give headcount see sense us it's a the comp perhaps

Chris Gallagher

Bill, the sales our just looked in performance. at we organization, at force, the terms of of size as we looked entire

headcount were And force to clear part able I And of that? by expanding individuals. sales the on I you do guess, the really mind so, second reduce wasn't question, on several on the your after. we overall

William Sutherland

the what in? the and prior sales size I of Just Access force being added guess, to was, last year

Chris Gallagher

Bill, numbers really of strategies, of consider size and kind so percent seen me decrease. considerable, though. and I on the with force. have and impactful the successful the refocusing handy sales exact us But the it's the been I that's of reduce here think a we've allowed don't to in terms footprint

William Sutherland

focus cart have? hospital a existing motion? focus using sales You installed may of the is technology that How's mentioned, forward Chris, your sales the process over the proprietary going helping or

Chris Gallagher

think, the a in itself, So is important kind couple cart of I different viewpoints.

providers reliable experience use know which for to to patients. robust, unified ability standardize our on our the for I simplistic and clients facilitates is foremost we is and and a and the a better think experience, first

replicating clients a of experience. standpoint, from encounters, to high so, has and successful it resonated of And very that having great reliable well quality led in encounters with very that in-person terms do our job an programs

the building have is assistance strategy whether the application the a that engagements IQ may an with with needs additional facilities, program team sales hardware. it the when applied to the it that to know-how the or as hospital. Telemed such sales our build with telemedicine many the In of clinical they a tools, gives so, and And team, relationship team to be include the opportunity

an gives problems. add in sales clients And so, it team to sales help our to tool process their solve their additional

William Sutherland

getting ongoing the technology results the in add that the it is the implementations of operation. worth value So, client the of it I guess, higher for the – cost is

Chris Gallagher

necessarily takes in cost. connect not do actually, the There to an in most cart it's we our place, much can higher so hospital to market. And the can the a stethoscope that lower encounter to the of are physical to, has which which a And of cost proprietary than be exam. endpoint cases, video the rest carts

we're oftentimes price, we at standardization. better of better come only at And value. a not So, also to able when performance actually in and consider value value but better in terms

William Sutherland

a like Sounds win-win.

Operator

for turn question-and-answer our closing concludes over session. Gallagher Chris any back to This remarks. I would conference like the to

Chris Gallagher

our fourth and next to provide an Thank look on quarter quarter our you to you again full-year results. everyone who joined call today. update We forward to with meeting and

Operator

now has today's concluded. attending Thank conference The for presentation. you

disconnect. now may You

SOC Telemed (TLMD) 12 Nov 212021 Q3 Earnings call transcript