LifeMD, Inc.

Q4 2022 Earnings Conference Call


spk_0: good afternoon thank you for joining us today to discuss the result for life and these fourth quarter in for your ended december thirty one twenty twenty two during the call today are just and schreiber chairman and chief executive officer and mart benefits chief financial officer of life md the them it's prepared remarks will open the call for a question and answer session i'd like to remind everyone that it is call is being hosted via webcast and the recording will be made available via the lake in today's press release which is available and of investor relations section of the company's website before we begin our like to remind everyone that during his call the company will make a number of forward looking statements which are subject to numerous risks and uncertainties that may cause the company's actual results to differ materially from those projected these risks and uncertainties are described in the company's ten k and ten que filings and in other filing that life md may make with the fcc from time to time for looking statements made during his car based on current information available to the company as of today march twenty second two thousand twenty three the company assumes no obligation to update or revise any for looking statements after today's call except as required by law also please note that management will be discussing sir in on gap financial measures that the company bullies are important in of evaluating life md performance details on the relationship between the non get measures to the most comparable gap measures and reconciliation zero of can be found in a press release issued earlier today finally i'd like to remind everyone that today's call is being recorded and will be available for replay an in retribution section of the company's website now i like to turn a call over to life mdc you just schreiber there you go ahead
spk_1: thank you and good afternoon everyone today after the market closed we should approach really did yelling our fourth quarter and or your results and uploaded an update corporate presentations the flight focused on our twenty twenty two finance performance out the hyperlink in our earnings release and on investor relations face or website i'm pleased to announce the twenty twenty two with a pivotal year for life and the one in which we successfully evident from being high growth provider of telemedicine products into a diversified provider of differentiated tell health services and products i'd like to highlight several key initiatives we execute upon a twenty twenty two that i believe that define our accomplishments and were life and he is heading of start by saying we're pleased to report the light bill de achieves consolidated adjusted either profitability and the fourth quarter twenty twenty two in line with in line with the guidance we provided over the past year
spk_2: this achievement
spk_1: represents a crucial inflection point for our company and demonstrative of the quality of our products and services as well as our commitment your financial discipline we are now well positioned to deliver strong double digit top lane growth with meaningful profitability and twenty twenty three a beyond lol we temporarily experience of slow down and tell outgrowth in the second half of twenty twenty two consistent with our guidance we have successfully realigned our marketing product and technology and doesn't support ongoing wrote in the most profitable area them our company as reflected in a twenty twenty three guidance we released earlier today we expected effort to produce top growth of twenty twenty five percent and twenty twenty three along with meaningful adjusted ebitda profitability and the elimination of our cash burned by mid twenties wait for it that game last year we launched our names big brand like than the which provides virtual primary care services our early results have been outstanding despite launching in mid twenty twenty two with minimal early and and we ended twenty twenty do with approximately seven thousand deputy the ahead of our previous guidance we attributed to access to a proprietary tell our platform and philly medical group which i believe are too much valuable assets our technology platform has reports capability that span virtual care pharmacy and marketing thanks to the integration of features like a clinician centric electronic medical record system proprietary algorithms for tape load balancing and scheduling the or and functionality lab testing digital prescription capabilities patient provider audio video in are facing cloud pharmacy for settlement and more or platform allows us to provide nuance treatment offerings and complex care journey to deliver the highest level of care to our patients as demonstrated by the consistently higher of youth and feedback we receive from our patients the launch of our virtual private your business has expanded our treatment options to cover hundreds of condition providing an invaluable gateway for us to engage with our patience and support their daily and long term health care needs moving forward we plan to continue to invest in and diversified treatment offerings on our virtual primary care platform and expand patient access by participating in medicare and contracting with private pairs or twenty twenty three we project that life of the primary care revenue or revenue from our virtual primary care bill that will exceed five million dollars compared to just over five hundred thousand dollars and twenty twenty two third and twenty twenty to life and the launched it's enterprise tell help offering which the port pharmaceutical medical device and diagnostic company seeking to enhance the commercialization other products according to a cuba the us lifetime to the industry spent approximately ten billion dollars per year and digital solutions in this area labour the offers an attractive affordable and differentiated solution by leveraging are proprietary tell our proprietary technology platform to the medical group established brands pharmacy partnerships and patients support infrastructure like them the offers a comprehensive and flexible infrastructure making us an ideal tell our partner for these companies this infrastructure read the broader audience while helping with pay for insurance and outcomes all while enhancing the long term revenue streams of our partners so far during the past two quarters new partnerships have formed and begun to grow leaving us quite optimistic about future prospects for expanding the new offering with existing in new partners and twenty twenty three and beyond we are also inactive dialogue with a variety of other national organization that are seeking to partner with a leading tell our platform like like andy we are excited about the immediate and long term value creation and growth opportunity presented by the person perspective partnership fourth we continue to get all our work simply subsidiary while enhancing and diversifying it's workplace services platform under the leadership of it's cold founder and ceo sean fitzpatrick work simply exceeded all expectations and generated approximately thirty six million in revenue and five million and iba in twenty twenty two we anticipated his numbers will increase significantly and twenty twenty three with projected revenue of fifty to fifty five million and iba fifteen to twenty million with the potential for continued growth in twenty twenty two work simply made several important strides toward the verse find it's business from a single product pdf platform into a multifaceted workplace and documents services platform offering pdf resume proprietary forms and digital signal signature solutions looking ahead to twenty twenty three a business plan to further differentiate and expand it's consumer and small business offerings despite receiving numerous offers to buy the busy life of the voluntarily decided to retain it's majority ownership edition and works that way we believe that works simply as at an important inflection point and the decision will be materially a creative to future shareholder value finally during the latter half of twenty twenty to life of the executed several important initiative to further strengthen the company's long term liquidity and capital position these initiatives include significantly reducing our cash burn and successfully clothing a credit facility with avenue capital the provided us with an additional capacity up to forty million dollars why some the is on a pathway to eliminate it's cash burned by the middle of twenty twenty three and i believe our actions that position the company for long term success and enable us to invest in the continued profitable growth of our business would that i went out for on the call over to our cfl mark bennett then will provide a summary the financial results mark
spk_3: thank you justin and good afternoon everyone
spk_1: spencer's them with our gardens for the past year later be delivered adjusted either the profitability of six hundred thirty one thousand and the fourth quarter of two thousand and twenty two marking the first quarterly just the david that profit for life from the this was a particularly remarkable achievement in the evolution of our company when you consider that in the same year ago period are adjusted ebitda loss was a loss of a point two million additionally as was released them for your twenty twenty three guidance earlier today we expect revenue growth are approximately twenty to twenty
spk_3: five percent with adjusted ebitda growing to between twelve and eighteen million for the year we believe this reflects the remarkable financial progress we have made and will continue to make when you consider we have adjusted ebitda losses of fifteen million and thirty eight million and two thousand twenty two and twenty twenty one respectively
spk_1: at the same time we recently executed upon the significant that financing with avenue capital to provide will we believe to be more than ample long term capital lived on the and significantly bolster our current balance sheet
spk_3: as we illustrated interrupted corporate presentation made available earlier today on ion that life and the dot com
spk_1: we believe this enhanced liquidity coupled with a minimal near term cash burn which we expect to be eliminated by mid twenty three puts why some the in a very strong financial position acted you know long term brought plans are also allowing us to voluntarily retain the works simply outside which we believe will continue
spk_4: to be a creative the future shareholder value
spk_3: now turning to result for the fourth quarter of twenty two revenue in the fourth quarter totaled twenty eight point one million up three percent as compared to the same year ago quarter fourth quarter revenue was impacted by the noncash impact of two point nine million related to the for all of our house ownership and ninety four percent of total revenues in the fourth quarter were generated by recurring subscriptions tell how net revenues declined by twenty percent to sixteen point four million however excluding the impact of the for the water supply revenue recognition that revenues declined by six percent mostly reflecting the company's refocus on advertising investment targeting our most profitable segments with growth
spk_1: returning and twenty twenty three offer more meaningful profitable base more simply continued to execute extremely strongly against the plan we put in place only last year and delivered net revenues of eleven point seven million an increase of seventy one percent first prior year while generating any but the margin exceeding fifteen percent for the water on the tower outside of the business we increase the wrath of subscriber base by twenty two percent first prior year and a quarter with over one hundred and sixty nine thousand active subscribers and so are blended catch the climb by eighteen percent versus the same year ago period we're simply subscriber count increased by sixty four percent first prior year or two hundred and sixty eight thousand gross margins for the fourth quarter reached eighty six percent up six hundred basis points verse prior year
spk_3: gross profit for the quarter totaled twenty four point one million an increase of ten percent from the same year ago period
spk_4: operating expenses for the fourth quarter totaled thirty four point four million a decrease of one point one million versus a year ago period
spk_1: operating expenses included six point seven million of niqash expenses associated with stock based compensation and tangibles writedowns depreciation and amortization expenses the intangible right down was related to life and the truing up the valuation of the cleared acquisition assets which were originally vi assuming most are now it's worth she than the timeframe allotted importantly the are not liability has now been removed from the purchase consideration and the fourth quarter of two thousand and twenty two we also reduced our marketing expenses a percentage of revenue to sixty two percent of seventy seven percent the revenue in the same year ago period our gaap net loss attribute about the common stock holders for the fourth quarter total twelve point seven million or forty cents per share this compares to a net loss attributable the common stock holders and nineteen million or sixty two cents per share in the fourth quarter of two thousand and twenty one
spk_3: adjusted dps a non gaap financial measure that excludes noncash expenses preferred stock dividends litigation expanse of foreign currency translation total the gain of two cents per share as compared to a loss of twenty seven cents per share the same year ago period
spk_1: adjusted ebitda non gaap financial measure excluding the same account categories as noted in the just dps totaled again of six hundred thirty one thousand and the fourth quarter of two thousand and twenty two this compares to an adjusted ebitda loss of a point two million and the same year ago quarter
spk_3: now turning to results for the full year two thousand and twenty two revenue for the full year two thousand twenty two total one hundred and nineteen million up twenty eight percent as compared to twenty twenty one how how can that revenues grew by twenty one percent eighty two point six million were simply net revenues go forty seven percent
spk_4: to thirty six point four million
spk_1: gross margins for a full year reached eighty four percent of three hundred basis points first prior year gross profit for the or total the hundred point three million an increase of thirty four percent from the prior year our gaap net loss attributable to common stock holders for the for year totaled forty six point eight million or a dollar fifty seven per share this compares to a net loss attributable to common stock holders of sixty one point eight million or two twenty nine per share and twenty twenty one adjusted e p s a non gaap financial measure that excludes noncash expenses preferred stock dividends litigation expensive foreign currency translation total the loss of forty seven cents per share as compared to a loss of a dollar forty two per share in the same year ago period
spk_3: adjusted ebitda a non gaap financial measure excluding the same cow categories as heard of ever just dps total the loss of fourteen point seven million in two thousand twenty two this compares to an adjusted ebitda loss of thirty eight point three million in two thousand and twenty one now turning to our balance sheet cash total of
spk_1: four million as of december thirty first two thousand twenty two subsequent a quarter and we closed on credit facilities some avenue capital providing up the forty million total capital was in million funded at closing as provided now released earlier today we have continued to reduce our cash burn and extra
spk_3: to eliminated by the middle of twenty twenty three let's wrap our financial results i'd now like the time the call back over to justin
spk_5: thanks mud
spk_1: in summary twenty twenty two with a pivotal year for late the as we evolved from a singular focus group company in the telemedicine space you a diversified provider of tell our services the proud of demonstrator our ability to build life and be profitably with long term sustainable growth achieving a job that even a profitability in the fourth quarter twenty twenty two putting in had we expect or profitability to continue to increase materially and twenty twenty three and beyond with a rapid resumption of strong double digit growth brother excited about the growth of our virtual primary care platform or enterprise business and the new treatment areas we've expanded into and twenty twenty two hundred and samia and wait bash men the product that we build at life and he is amazing if you're your little call arena transparent and you aren't yet convinced that go to life and dot com schedule a virtual did that with one of provider there will be great experience we also recently posted videos on the medical team cage or website with may have the full time providers in our family the medical group then a few minutes watching funny videos will give you a pretty good idea of the quality of doctors nurse practiced there's the practice on our platform i assure you you'll be impressed the opportunity for a brand in the norman we're still in the early days virtual care i believe that over the next five to ten years technology driven virtual and in health health care for fundamentally change or most americans interact with their providers and managed to help it is a normal market opportunity and life of the his position to be a long term leader in the state what's even better than the market opportunity is a positive impact our company's success and the success of our shareholders will have on millions of people's lives if you are invested in life and d you're invested in helping people across america reach incredible doctor that they desperately need the and live longer healthier and happier live because of before i closed out i want to take this opportunity to express my gratitude all of our stakeholders the board of directors of life and v and i appreciate your continued support of our company and our mission to improve access incredible and affordable or to a health care with that we would like open the corporate sunni
spk_0: thank you had to some will be conducting a question and answer session if you like to ask a question please press star one i had her phone keypad a confirmation toggle in a key allies in the questions you may press start to if you might remove your question from the queue for participants uses be equipment it may be necessary to pick up your has a before pressing the starkey and our first question comes on i have david larson with bt id
spk_6: he was he was your question
spk_7: hi regulations on are getting to profitability that's that's a great accomplishment i'm too many talk a little bit about be due to twenty million in revenue that is obviously a little bit lower than we were on modeling even if you add back to sleep million i'm still came in i think almost flash quench leave
spk_3: just any more color there will be would be great thank you air that this is mark a couple of things on that one
spk_1: as we've talked about last couple calls
spk_3: the fourth quarters really where he finished out reallocating a lot of us band and pruning certain areas that were not as profitable and then number two are no secret everyone we ran a coupon prior to completing this financing with a fairly lean balance sheet and i'd say overall was slightly under and the and on marketing and batman them that you know in general but to our subscriber the was to new patients which also had an impact on the quarterly revenue those are all things that are behind us now
spk_7: man where you know tracking gaga say return back to our double digit growth rates are starting in the first quarter
spk_3: surf for the revenue guidance for two thousand and twenty three what is the split between on health care and software yeah so healthcare is roughly around the hundred million
spk_7: the bouncers roughly in the the software in our so what we're looking at the not simply built as being around the forty five fifty million mark and then law the have trouble as being around one hundred two hundred five
spk_1: okay so a good sort of go forward steady growth rate for the health care of business would be fifteen to twenty percent is that correct yeah i'd say probably twenty percent plus some one of the things you have to remember that some of the growth and the health care business is back loaded in the year as we continue to build a virtual primary care bizarre i we've shown that we've been able to get a lot of scale up as is pretty quick may we see a lot more opportunity they end up as as but ah given the nature of that as as you know less revenue per month and say ah some of the higher our daughter died as and says like the product business public very have attention on the takes a little bit more time off for those initial dollars to produce the same amount of revenue
spk_7: so i think long term girlfriend tell as twenty percent plus on because you're going to start to see more traction coming from primary care and some there's no are offering to take a little bit of time for dolled up
spk_8: okay and then at for que twenty three what sort of even job margin would you expect on the software business and then also on the healthcare business
spk_3: as as a as a little early for us yeah that and my we have it out the same better than the guidance but you know both of the businesses will be profitable by other gravity forcibly comfortable right now lots of them will be profitable though the middle of the year i'm happy to provide that ah
spk_7: what of it as you move through the out the air ah but i think of aware that premature to canada
spk_3: okay and then for the forty million credit facility how much of that you have access to right now and is or any other any stipulations for example you have to be at a certain utah level in order to gain you know yet arm twenty million are there any contingencies or anything like that now so we already funded fifteen million of in a closing the other ah five that is committed there's no contingency as long as you're in compliance with the agree that there's no
spk_4: he does related covenant in the agreement will have to get it's i love about his average a spot the be in general compliance and the reason that you know we didn't necessarily combat right away and mentalist access job at all on and we can average on the later on the air it's for committed genocide trust the to
spk_9: ninety million upsides hang on you know in general are we have the ability to access that on once the company reach a benefits all data bases across new hundred fifty million or tpm revenue which shoves to expect to do ah around this year
spk_7: okay
spk_3: okay so sounds like you've gotta be at one hundred and fifty million in revenue in order to access the second twenty million of that forty million dollars is i correct yeah yeah then today we actually are our updated corporate presentations just one up to the website are we illustrate strive to twenty twenty three cash flow is going to look like for the air ah man we have more than sufficient cushion based on our estimates for this year
spk_7: and go at that point by the and video we'd expect have access to additional twenty were not factoring in and plan and finding the business based on meeting that but we expect august they have access to it by the under the
spk_3: okay and then what sort of revenue multiples have these pdf like software business is song for i think there have been a few transactions announced in the yeah east
spk_1: yeah so forms were on my soul to dropbox for ninety five million all cash at public information on it all the mob ball that we've been hearing at that the grade than you know who acts plus to the free access to provide them with far the biggest factors being the
spk_4: the economic profile the size of the company any differentiation that they have as well as
spk_3: what a subscriber base looks like about does have typically been ah and once what is probably the most recent
spk_7: transaction that we think relevant but we also thing as a lot more value to be hadn't the watch them play the jazz are they continue to differentiate born born frankly their financial profile confused outstrip our expectation and justin i think you talked a little bit about i'm entering into deals with health plans and larger antares that i hear that correctly and then
spk_1: like the revenue cycle process for building plans for which will carry it's not a simple thing just any any color or be very helpful thanks i'm sure if it were working with the as well as three excellent partners and one ah to kind of been the billing and rather like a management side of thing or another on the client side of then and licensing side of things and contracting so i get really good about of you know we're not we're not going to but certainly than initially right we're not going to try to regular try to do all of that internally and
spk_10: that the providers that were working with ah that the catawba firms are working with on the billing side i work with you know several several other very large companies in the original care space that that i'm already working with medicare and with private pairs and sell them lot of experience doing that then yeah really car
spk_1: wouldn't that that there will be ever do a great job and get the live by the summer okay and then did it affect david we're going to be starting it really it initially focusing on on contracting with the power plants in the top ten states where our pick patient volume currently as and as the that the grid the with peyton they've done now in a bit on the guys we've been given from
spk_7: ah from the company that the three to form is it should be a three to four months profit to to get everything in place
spk_1: okay and then to sweat how do you see your pair makes trending by let's let's call it like for to of fiscal twenty four would you still expect like eighty percent of the healthcare business to be cash k or do you think there's gonna be a material shift where i have no idea has managed to think it's i think of the i don't bigger than a way that i can approximate that i can i can give your data point that might be helpful in a week today thirty plus percent of patients that come to our website but ultimately don't pay cash for of into with one of our providers alice in surveyed that their their reason for not falling through with life a deal for the reason for not purchasing from us was because they wanted to use their insurance ah oh you know what what what percentage of those other individual
spk_7: are going to opt to pay cash vs using their insurance i don't know i really don't know the number if i had a guess
spk_1: i would say you're out to be fifty fifty fifty percent of the business would be people using their insurance card and paying a copay i'm and fifty percent would be people paying cash that are on highlights well plan are uninsured
spk_11: okay and then just any i'm sort of on comments on these larger and cities that you've been talking about bomb would be health plans or maybe a large retail chain walgreen see the on a finer be helpful
spk_1: yeah we we were in i would characterize them as late stage conversation where's multiple in a multi billion dollar national organization regarding various types those of partnerships that rely on our your virtual primary care platform i believe the of these things are take a lot longer than we expected them to take that i can report that the pipeline currently is stronger than it's ever been we have more interest than we've ever had the company he especially with the the financing that we completed this week is now it has a very strong balance sheet and is does really well positioned right thing to execute on somebody thing and it's not to say what the or how successful are going to be because especially when you're working with the larger companies lobby things are pilots initially i think will be have to talk about the pilot program the be very visible ah when we launched them
spk_7: but if they're successful they would be transformational for our company and it's not one there's quite a number of them and some of them are with national retailers some of them are web of of the largest helped your product and pharma companies in the world
spk_1: you know i've been the something that has you know i've been talking our shareholders bally's calls for a while so tom tufted tell whether they're gonna we're gonna get a renowned from these things in the coming weeks or it's gonna take another couple months but we build our platform to be a partner to these companies and to the organization ends when i can report is that you know we're seeing more interest in and more traction in the bill that pipeline that ever and i remain confident that in over the long run that we're going to get some these things done and and hopefully eventually a lot of have done okay and then just one quick follow up there so you can become the virtual primary care resent her and city sort of white label for a large retailers at the idea or something along those lines yeah i think what they think a lot of large i think for i think a lot a large retailers could not dead virtual primary care as other product that they can monetize and through their retail location i'm that that the very can simple way to look at it and a lot of a lot of farmer help your product companies most of them
spk_12: no they're they're being forced to spend more more money on digital lucian as part of their commercialization effort it said ten billion dollar your number is growing and there aren't a lot over there aren't a lot of still although there are a lot of tell our company there aren't a lot to tell our companies with the technology platform and them
spk_0: medical group and all the expertise on the adherents an engagement side that life from the have ah
spk_6: he we are of alec here in our president lead for further that that than the or he of likely relationships than people really respect him and felt super confident that we're going to get couple of the things done this year hopefully much sooner than this year and and from there will get a build a build a good bit that your over the next couple years but it

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.