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Classified in: Health, Business, Covid-19 virus
Subjects: ERN, ERP

Tabula Rasa HealthCare Reports Second Quarter 2022 Results


MOORESTOWN, N.J., Aug. 4, 2022 /PRNewswire/ -- Tabula Rasa HealthCare, Inc.® (Nasdaq:TRHC), a leading healthcare technology company advancing the safe use of medications, today reported financial results for the second quarter ended June 30, 2022.

"Our solid second quarter results were driven by improved PACE enrollment in the quarter. With the sale of PrescribeWellness complete, we have significantly strengthened our balance sheet and taken one of several major steps forward in refocusing the company to better capitalize on the growth opportunities ahead of us," said Calvin H. Knowlton, PhD, TRHC's Chief Executive Officer, Chairman and Founder.














Key Financial Results

(in millions except percentages)
















Three Months Ended June 30, 


Year over Year



Q2 2022



2022


2021


Change



Guidance

Revenue from continuing operations


$

72.6


$

64.3


13

%


$

66 - 69

Net loss from continuing operations


$

(12.7)


$

(14.1)


10

%




Adjusted EBITDA from continuing operations


$

2.1


$

3.3


(37)

%




 

Second Quarter 2022 Financial Results

All comparisons, unless otherwise noted, are to the three months ended June 30, 2021, and reflect continuing operations

A reconciliation of generally accepted accounting principles ("GAAP") in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Recent Events

On August 1, we completed the sale of the PrescribeWellness business to Transaction Data Systems for a purchase price of up to $140 million in cash, of which approximately $125 million was paid at closing, subject to certain customary post-closing adjustments, and up to an additional $15 million to be paid contingent upon the PrescribeWellness business's achievement of certain performance-based metrics during the fiscal years ending December 31, 2023 and 2024. 

The proceeds from the sale were utilized to repay all amounts outstanding, a total of $57.4 million, under our line-of-credit. We remain in active discussions to divest our SinfoníaRx and DoseMe businesses before the end of calendar 2022. Management expects the completion of these divestitures and renewed focus on our core operations to enable a significantly improved margin profile.

Operational Metrics

To provide greater transparency into our financial results, we are providing the following operational metrics.

Business Outlook

This outlook updates the previously issued financial guidance that was provided on May 5, 2022. With the completed sale of PrescribeWellness on August 1, 2022, and anticipated divestitures of SinfoníaRx and DoseMe, we are realigning our operations to support our go-forward business.


















Year over year growth



Low


High



Low

High

Three Months Ended September 30, 2022


(in millions except percentages)

CareVention HealthCare revenue


$

72.0


$

74.0



11 %


14 %

Other revenue from continuing operations


$

0.5


$

1.0



NM


NM

Total revenue from continuing operations


$

72.5


$

75.0



7 %


10 %
































Year over year growth



Low


High



Low

High

Year Ended December 31, 2022


(in millions except percentages)

CareVention HealthCare revenue


$

283.0


$

288.0



14 %


16 %

Other revenue from continuing operations


$

3.0


$

4.0



NM


NM

Total revenue from continuing operations


$

286.0


$

292.0



10 %


12 %

NM = not meaningful

With respect to the above guidance, we note that for the balance of 2022, the Company is forecasting monthly net enrollment sequential growth within its CareVention pharmacy services of 0.9%, which represents an improvement from our prior target of 0.7% and is consistent with the rate of growth we observed during the second quarter of 2022.

Quarterly Conference Call

The second quarter 2022 earnings conference call and webcast will be held tomorrow, Friday, August 5, 2022, at 8:30 a.m. ET. Those interested in participating via webcast in listen-only mode can access the event here . For participants who would like to participate via telephone, please register here to receive the dial-in number along with a unique PIN number that is required to access the call. A replay of the earnings call will be available via webcast at the Investor Relations section of TRHC's website (ir.tabularasahealthcare.com).

About Tabula Rasa HealthCare

Tabula Rasa HealthCare provides medication safety solutions that empower healthcare professionals and consumers to optimize medication regimens, combatting medication overload and reducing adverse drug events ? the fourth leading cause of death in the U.S. TRHC's proprietary technology solutions, including MedWise®, improve patient outcomes, reduce hospitalizations, and lower healthcare costs. TRHC's extensive clinical tele-pharmacy network improves care for patients nationwide. Its solutions are trusted by health plans and pharmacies to help drive value-based care. For more information, visit TRHC.com.

Non-GAAP Financial Measures

In addition to reporting all financial information required in accordance with GAAP, TRHC is also reporting Adjusted EBITDA, which is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Adjusted EBITDA consists of net loss plus certain other expenses, which includes interest expense, provision for income tax, depreciation and amortization, impairment charges, settlement costs, business optimization expenses, severance costs, executive transition costs, divestiture-related expense, acquisition-related expense, and stock-based compensation expense. TRHC considers settlement costs to include amounts payable by TRHC or reductions to amounts owed to TRHC as a result of a contractual settlement. TRHC considers business optimization expenses to include contract termination payments, severance, retention payments, and other employee and non-recurring vendor costs incurred related to our business optimization initiatives during 2022. TRHC considers executive transition costs to include nonrecurring costs related to hiring and onboarding of newly named executive officers. TRHC considers severance costs to include severance payments related to the realignment of our resources. TRHC considers divestiture-related expense to include nonrecurring direct transaction costs. TRHC considers acquisition-related expense to include nonrecurring direct transaction and integration costs. TRHC believes the exclusion of these items assists in providing a more complete understanding of the company's underlying operations results and trends and allows for comparability with TRHC's peer company index and industry and to be more consistent with TRHC's expected capital structure on a going forward basis.

TRHC presents this non-GAAP financial measure in this release because it considers it to be an important supplemental measure of performance. TRHC uses this non-GAAP financial measure for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. TRHC believes that this non-GAAP financial measure provides additional insight for analysts and investors in evaluating the company's financial and operational performance. TRHC also intends to provide this non-GAAP financial measure as part of the Company's future earnings discussions and, therefore, its inclusion should provide consistency in the Company's financial reporting.

Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of Adjusted EBITDA to its most directly comparable GAAP measures provided in this release, including in the accompanying tables.

Safe Harbor Statement

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that we believe to be reasonable as of today's date. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include TRHC's expectations regarding healthcare regulations, industry trends, available opportunities to TRHC, the financial and operating performance of TRHC, the impacts of the COVID-19 pandemic, the plans and objectives of management, TRHC's strategic initiatives and the anticipated benefits thereof, and TRHC's expectations for 2022. Such statements are identified by use of the words "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "should," "goals" and similar expressions. These forward-looking statements are based on management's good-faith expectations, judgements and assumptions as of the date of this press release. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: the impacts of the ongoing COVID-19 pandemic; our continuing losses and need to achieve profitability; fluctuations in our financial and operating results; our ability to manage our cash flows; the volatility of our stock price; the extent to which we are successful in gaining new long-term relationships with clients or retaining existing clients; the acceptance and use of our products and services by PACE organizations; the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable governmental regulations; our ability to maintain relationships with a specified drug wholesaler; increasing consolidation in the healthcare industry; competition from a variety of companies in the healthcare industry; managing our growth effectively; our ability to adequately protect our intellectual property; macroeconomic conditions, including the impact of inflation, on our business and operations; the sale of the PrescribeWellness business; our ability to execute on our planned divestitures of our SinfoníaRx and DoseMe businesses; risks related to actions of activist stockholders; and the other risk factors set forth from time to time in our filings with the Securities and Exchange Commission ("SEC"), including those factors discussed under the caption "Risk Factors" in our most recent annual report on Form 10-K, filed with the SEC on February 25, 2022, and in subsequent reports filed with or furnished to the SEC, copies of which are available free of charge within the Investor Relations section of the Tabula Rasa HealthCare website http://ir.trhc.com or upon request from our Investor Relations Department. Tabula Rasa HealthCare assumes no obligation and does not intend to update these forward-looking statements, except as required by law, to reflect events or circumstances occurring after today's date.

 

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands)




June 30, 


December 31, 



2022


2021

Assets 





Current assets: 







Cash


$

26,522


$

9,395

Restricted cash



7,062



6,038

Accounts receivable, net



20,324



21,405

Inventories



5,798



5,444

Prepaid expenses



3,534



3,812

Client claims receivable



14,419



11,257

Other current assets



25,021



18,033

Current assets of discontinued operations



163,624



14,511

Total current assets



266,304



89,895

Property and equipment, net



10,126



11,778

Operating lease right-of-use assets



14,656



16,323

Software development costs, net



31,275



29,254

Goodwill



115,323



115,323

Intangible assets, net



41,970



45,358

Other assets



4,814



3,929

Noncurrent assets of discontinued operations



?



187,558

Total assets


$

484,468


$

499,418








Liabilities and stockholders' equity (deficit)







Current liabilities:







Line of credit


$

57,200


$

?

Current operating lease liabilities



3,038



3,275

Accounts payable



15,802



8,870

Client claims payable



8,751



8,398

Accrued expenses and other liabilities



50,179



40,997

Current liabilities of discontinued operations



19,158



12,380

Total current liabilities



154,128



73,920

Line of credit



?



29,500

Long-term debt, net of discount



231,626



319,299

Long-term debt - related party, net of discount



88,337



?

Noncurrent operating lease liabilities



14,034



15,792

Deferred income tax liability, net



1,034



1,402

Other long-term liabilities



1,992



176

Noncurrent liabilities of discontinued operations



?



3,573

Total liabilities



491,151



443,662








Stockholders' equity (deficit):







Common stock



3



3

Treasury stock



(4,292)



(4,292)

Additional paid-in capital



335,756



320,392

Accumulated deficit



(338,150)



(260,347)

Total stockholders' equity (deficit)



(6,683)



55,756

Total liabilities and stockholders' equity (deficit)


$

484,468


$

499,418

 

TABULA RASA HEALTHCARE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)
















Three Months Ended


Six Months Ended



June 30, 


June 30, 



2022


2021


2022


2021

Revenue:









Product revenue


$

55,892


$

46,858


$

106,865


$

88,700

Service revenue



16,705



17,439



32,842



34,375

Total revenue



72,597



64,297



139,707



123,075

Cost of revenue, exclusive of depreciation and amortization shown below:













Product cost



43,384



35,064



82,936



66,421

Service cost



13,247



12,556



26,416



25,178

Total cost of revenue, exclusive of depreciation and amortization



56,631



47,620



109,352



91,599

Operating expenses: 













Research and development 



3,243



4,311



7,208



7,370

Sales and marketing



2,172



2,539



4,821



5,506

General and administrative 



15,150



16,652



31,028



31,332

Long-lived asset impairment charge



?



?



4,062



?

Depreciation and amortization



5,489



4,980



11,231



9,781

Total operating expenses 



26,054



28,482



58,350



53,989

Loss from operations



(10,088)



(11,805)



(27,995)



(22,513)

Interest expense, net



2,444



2,182



4,713



4,729

Loss from continuing operations before income taxes



(12,532)



(13,987)



(32,708)



(27,242)

Income tax expense



159



81



375



202

Net loss from continuing operations



(12,691)



(14,068)



(33,083)



(27,444)

Net loss from discontinued operations, net of tax



(36,919)



(7,013)



(44,720)



(13,129)

Net loss


$

(49,610)


$

(21,081)


$

(77,803)


$

(40,573)














Net loss per share:













Net loss per share from continuing operations, basic and diluted


$

(0.53)


$

(0.60)


$

(1.38)


$

(1.19)

Net loss per share from discontinued operations, basic and diluted



(1.54)



(0.31)



(1.87)



(0.56)

Total net loss per share, basic and diluted


$

(2.07)


$

(0.91)


$

(3.25)


$

(1.75)














Weighted average common shares outstanding, basic and diluted



23,959,726



23,268,131



23,913,050



23,140,043

 

TABULA RASA HEALTHCARE, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)










Six Months Ended



June 30, 



2022


2021

Cash flows from operating activities:






Net loss


$

(77,803)


$

(40,573)

Adjustments to reconcile net loss to net cash provided by operating activities:







Depreciation and amortization



18,562



23,244

Amortization of deferred financing costs and debt discount



939



1,172

Deferred taxes



(368)



263

Stock-based compensation



15,301



20,951

Acquisition-related contingent consideration paid



?



(67)

Impairment charges



40,510



?

Other noncash items



(54)



7








Changes in operating assets and liabilities:







Accounts receivable, net



2,979



(2,737)

Inventories



(354)



(605)

Prepaid expenses and other current assets



(7,916)



(3,811)

Client claims receivables



(3,162)



207

Other assets



(769)



(2,546)

Accounts payable   



9,295



(926)

Accrued expenses and other liabilities



9,188



7,646

Client claims payables



353



(1,332)

Other long-term liabilities



2,139



7

Net cash provided by operating activities



8,840



900








Cash flows from investing activities:







Purchases of property and equipment



(471)



(970)

Software development costs



(17,870)



(14,011)

Net cash used in investing activities



(18,341)



(14,981)








Cash flows from financing activities:







Proceeds from exercise of stock options



60



3,082

Payments for debt financing costs



(350)



(8)

Borrowings on line of credit



27,700



12,500

Payment of acquisition-related notes payable



?



(13,000)

Payments of acquisition-related contingent consideration



?



(99)

Repayments of long-term debt and finance leases



?



(4)

Net cash provided by financing activities



27,410



2,471








Net increase (decrease) in cash and restricted cash



17,909



(11,610)

Cash and restricted cash, beginning of period



15,706



28,532

Cash and restricted cash, end of period


$

33,615


$

16,922

 

TABULA RASA HEALTHCARE, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(In thousands)
















Three Months Ended June 30, 


Six Months Ended June 30, 



2022


2021


2022


2021

Reconciliation of Net Loss to Adjusted EBITDA from Continuing Operations













Net loss


$

(49,610)


$

(21,081)


$

(77,803)


$

(40,573)

Add:













Interest expense, net



2,444



2,182



4,713



4,729

Income tax expense



159



81



375



202

Depreciation and amortization



5,489



4,980



11,231



9,781

Impairment charges



?



?



4,062



?

Business optimization expenses



?



?



787



?

Severance costs



?



162



575



162

Executive transition



150



?



150



?

Divestiture-related expense



1,414



?



1,534



?

Acquisition-related expense



?



99



?



217

Stock-based compensation expense



5,092



9,827



12,795



17,199

Loss from discontinued operations



36,919



7,013



44,720



13,129

Adjusted EBITDA from continuing operations


$

2,057


$

3,263


$

3,139


$

4,846

Adjusted EBITDA from discontinued operations



1,117



2,700



2,557



4,716

Total Adjusted EBITDA


$

3,174


$

5,963


$

5,696


$

9,562
















Three Months Ended June 30, 


Six Months Ended June 30, 



2022


2021


2022


2021

Reconciliation of Net Loss from Discontinued Operations, net of tax to
Adjusted EBITDA from Discontinued Operations













Net loss from discontinued operations, net of tax


$

(36,919)


$

(7,013)


$

(44,720)


$

(13,129)

Add:













Income tax (benefit) expense



(686)



52



(568)



130

Depreciation and amortization



?



6,639



7,331



13,463

Impairment charges



35,608



?



36,448



?

Settlement



1,448



500



1,448



500

Divestiture-related expense



66



?



112



?

Stock-based compensation expense



1,600



2,522



2,506



3,752

Adjusted EBITDA from discontinued operations


$

1,117


$

2,700


$

2,557


$

4,716

 

SOURCE Tabula Rasa HealthCare, Inc.


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