LifeMD, Inc.

Good afternoon. Thank you for joining us today to discuss LifeMD's first quarter fiscal 2021 results for the three months ended March 31st, 2021. Joining us today is the Chairman and Chief Executive Officer of LifeMD, Justin Schruber, and the company's Chief Financial Officer, Mark Benison. I'd like to remind everyone that today's call is being hosted via webcast and the recording will be made available via the link in today's press release. which is available in the investor relations section of the company's website. Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by management during the call. I'd like to remind everyone that today's call is being recorded and will be made available for webcast replay via instructions in today's press release, which is available in the investor relations section of the company's website. Now I'd like to turn the call over to LifeMD's CEO, Justin Schroeder, please go ahead.

Thank you, operator, and good afternoon, everyone. Thanks for joining us today for our first earnings call of 2021. And I hope that everyone in the call and their loved ones are safe and hopeful in the new year now that COVID vaccinations have started. As we enter a new phase of the pandemic curve, the management team would like to give thanks to all the frontline workers who have helped us get to this point and who continue to selflessly assist others before themselves. We are now well into the new fiscal year, and LifeMD is off to a strong start, both operationally and financially. Having served over 300,000 customers and patients since our inception, we continue to pioneer the future of healthcare, providing greater access to high-quality, convenient, and affordable care in 49 states, while converting more and more people to the possibilities of telehealth, as evidenced by our growing patient rolls. While the country continues to emerge from the COVID pandemic, which frankly helped accelerate our industry and our business. I am very pleased to report that LifeMD's growth and acceleration show no signs of slowing down. Indeed, demand continues to build to record levels. We sense that a broader tectonic shift is happening that will radically change the way healthcare is delivered to and experienced by millions of Americans. We are excited to be a part of it, And we are committed to our mission of increasing access to healthcare through direct-to-patient telemedicine. LifeMD stands at the vanguard of a healthcare revolution. I can say without hesitation that our explosive growth and strong patient conversion rates to our subscription-based models have done nothing but trend positively in 2021. And our fantastic results stand as evidence of the trend. In the first quarter of 2021, we grew revenue by over 300% as compared to the same year ago period and up 41% sequentially from the prior quarter. In addition to this phenomenal growth, we've also begun to see the early results of beginning to optimize and scale aggressively by better leveraging our cost structure while planting the seeds for building a leading telehealth business with profitability in mind. In the first quarter of 2021, we saw an approximate 15% to 20% improvement in customer acquisition costs versus the prior quarter and record-level gross margins exceeding 80%. This, coupled with the fact that 92% of our revenue currently comes from recurring subscriptions, is laying a very strong foundation for predictable growth over the long term, while also paving our pathway to profitability. At LifeMD, our core domain is in technology and marketing. more specifically our direct response marketing expertise, and in our ability to scale businesses on our holistic digital health platform quickly and efficiently. That said, we have a bigger mission in mind, and our primary goal has been to support the new permanence of patient-centric care through telehealth. The global pandemic surely accelerated the mass adoption of telehealth in 2020, and we use that as an opportunity to really entrench our customer base in products and services that have made a positive difference in the lives of our patients. To propel our narrative as pioneers in digital health, we also want to remind investors who are new to our story that LifeMD predates COVID and will endure long past the pandemic's retreat. We have built a platform that has the ability to support tens, if not hundreds, of directed patient telemedicine offerings. In seeing the value of our offerings, our patients are overwhelmingly choosing subscription-based products and services, which have been fueling our significant sequential growth. In fact, for the first time in company history, more than 50% of our telehealth revenue came from the rebuildings of already existing patient subscribers. As an industry leader in telehealth customer acquisition, our growth potential remains massive. We are operating in open white space of a nascent industry with a total addressable market of nearly a trillion dollars. To get to where we are now, we placed a strong emphasis on a few strategic imperatives that have really transformed LifeMD's potential. First, we have built a robust patient care process via our digital health platform with unlimited expandability across other indications. In the last week of the quarter, we launched NavaMD, a direct-to-patient clinical teledermatology services brand for women, which added further diversification to our growing portfolio of companies. NavaMD is our third launch in four years, and we look forward to further developing the brand. In addition, as I have spoken about before, we continue to anticipate launching our namesake LifeMD primary care platform later this summer. We believe this launch, coupled with our very successful current and future condition-specific telemedicine brands, will provide LifeMD with a powerful and differentiated end-to-end direct-to-patient telehealth platform. Second, in order to support our rapid revenue growth and brand expansion, we have strengthened our management team with leadership set to play pivotal roles in managing our growth. This includes rounding out our executive team with the hires of a chief digital officer, a chief medical officer, and chief financial officer. These hires, coupled with the previous hires to our executive team, have given LifeMD a formidable leadership team with significant direct-to-consumer healthcare and regulatory experience in scaling high-growth businesses. In summary, our first quarter of 2021 was not only marked by record top-line performance, it also saw us make significant strides in solidifying the infrastructure and which will enable LifeMD to scale efficiently towards longer-term profitability. And with that, I would like to turn the call over to our CFO, Mark Benethon, who will discuss the period's financials.

Mark? Thank you, Justin, and good afternoon, everyone. As Justin mentioned, we've had a fantastic start to fiscal 2021 thus far. Our products and services have been well-received, where our patients have overwhelmingly made the active choice of converting their accounts to subscription-based plans given the high level of service we provide and the recurring maintenance indications we treat. We continue to see strong unit economics with our LTV to CAC ratios on recurring subscriptions at or approaching 2x on a 12-month basis and the potential to well exceed 3x on a three-year basis. As of the first quarter of 2021, 92% of our revenue is now recurring subscription-based. To get into the quarter's results, revenue in the first quarter of 2021 totaled a record $18.2 million, up 323% as compared to the same comparable year-ago period, and up 41% from the fourth quarter of 2020. The growth was driven largely by a 349% increase in telehealth net revenues to $13.3 million. Our Legal Simply subsidiary contributed net revenue of 4.9 million, up 264% from the year-ago quarter. Including 1.3 million in deferred revenue associated with recurring subscriptions, total adjusted revenue on a non-GAAP basis would have been 19.5 million for the first quarter of 2021. Telehealth order volume grew 373%, versus the year-ago period, or 41% sequentially, to 164,452 orders. This increase was driven by a 252% increase in new patients plus strong retention of existing patients. As a result of the significant performance we had in Q1 and our continued momentum, we are raising our full year of 2021 revenue guidance to $90 million to $100 million, from the previously given guidance of 85 to 95 million, reflecting annual growth in 2021 of between 141 and 168% versus 2020. As of the current reporting quarter, we are running on an annualized revenue run rate of 72.8 million, calculated by the current reporting period revenues times four. Gross profit in the first quarter increased 403% to 14.9 million, compared to 3 million in the same year-ago quarter. Gross profit as a percentage of revenue in the first quarter of 2020 increased to 82% from 69% in the same year-ago quarter. The increase of 13% in gross profit was principally attributable to lower product costs, growth of our prescription business, and more stringent inventory management. Operating expense in the first quarter of 2021 was $26.8 million, up from $4.7 million in the same year-ago quarter. The increase was primarily due to increases of discretionary growth, selling and marketing expenses of $15.9 million, general and admin expenses of $5.3 million, other operating expenses of $737,000, customer service expenses of $127,000, and development costs of $114,000. The increase in general in admin costs was primarily due to $2.3 million in non-cash stock-based compensation expense. The majority of the stock-based compensation was related to the appointment of several executive team and board members. The increase in operating expense as compared to the year-ago period was associated with investments made to solidify the long-term rapid and scalable growth of LifeMD's infrastructure, which we expect to leverage these costs as the company continues to grow. Our GAAP net loss attributable to common stockholders for the first quarter totaled $11.6 million, or $0.47 per share. This compares to a net loss attributable to common stockholders of $2.4 million, or $0.23 per share in the first quarter of 2020. Adjusted EPS is a non-GAAP measure which excludes the $2.3 million in non-cash stock-based compensation expense. This figure totaled the loss of $0.38 per share for the first quarter as compared to a loss of $0.22 per share in the same year-ago period. In addition to stock-based compensation expense, our net loss for the first quarter of 2021 included other non-cash or financing-related charges such as interest expense, of $139,000, combined amortization expenses of $152,000, and financing transaction expense of $126,000. Adjusted EBITDA, a non-GAAP term which factors out these terms, totaled the loss of $8.9 million in the first quarter of 2021. This compares to an adjusted EBITDA loss of $556,000 in the same year-ago quarter. Now turning to our balance sheet. Cash totaled $13.4 million at March 31st, 2021, as compared to $9.2 million at December 31st, 2020. The increase was primarily due to a private placement with net proceeds of $13.5 million in the period completed in February 2021. As mentioned in our press release earlier today, we have started to do significant work to own in on our economics, and KPIs, and as a result, on a go-forward basis, have reduced our cash firm by approximately 30% at current revenue levels. We believe our current cash position and available funds provide the company with ample liquidity to meet our current needs and plans for growth. We also continue to make progress in securing additional financing to further augment our balance sheet position. This wraps up our financial results. I'd now like to turn the call back over to Justin.