LifeMD, Inc.

Good afternoon. Thank you for joining us today to discuss LifeMD's results for the fourth quarter and year-ended December 31st, 2023. Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer, and Mark Benethen, Chief Financial Officer. Following management's prepared remarks, we will open the call for a question and answer session. Before we begin, I would like to remind everyone that during this call, the company will make a number of forward-looking statements. which are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties are described in the company's 10-K and 10-Q filings and within other filings that LifeMD may make with the SEC from time to time. Forward-looking statements made during this call are based on current information available to the company as of today, March 11, 2024. The company assumes no obligation to update or revise any forward-looking statements after today's call, except as required by law. Also, please note that management will be discussing certain non-GAAP financial measures that the company believes are important to LifeMD's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today's call is being recorded and will be available for replay in the investor relations section of the company's website. Now, I'd like to turn the call over to LifeMD's CEO, Justin Schreiber. Please go ahead.

Thank you and good afternoon, everyone. After the market closed, we issued a press release announcing our fourth quarter and year-end results. Later today, We will post an updated corporate presentation on our website at ir.lifemd.com as well as our shareholder letter. I share a lot of my thoughts on our journey and where we're headed, so I encourage everyone on this call to give it a read. With that said, 2023 was a tremendous and record-setting year for LifeMD. Our revenue, patient subscriber base, and profitability all increased sharply versus 2022. Catalyzing this growth, was the launch of our nationwide GLP-1 weight management program in April 2023, which has since grown to become one of the largest and fastest growing businesses of its kind in the U.S. In fact, our weight management program finished 2023 with over 22,000 active patient subscribers, well ahead of the 20,000 patients we previously guided to. As of today's call, we have over 35,000 weight management patients, and that number is growing rapidly. In addition, as we announced in December, we made our largest foray to date within the business-to-business market when we executed a collaboration agreement with Medifast, one of the largest diet, coaching, and nutrition companies in the U.S. This collaboration included $10 million of collaboration fees and a $10 million equity investment while providing Medifast's 40,000 coaches and their customers with access to our industry-leading telehealth platform and affiliated medical group. I believe this transaction truly validates the strength of our highly differentiated direct-to-patient telehealth platform and offering. Our lifestyle healthcare business, led by RexMD, had its fourth consecutive year of double-digit annual revenue growth. Beyond the consistently strong growth we've seen with RexMD, the brand continues to be immensely profitable, finishing 2023 with a contribution margin in excess of 30%. In addition, our non-core subsidiary, WorkSimply, continued its consistent growth trajectory with 50% year-over-year revenue growth and EBITDA margins exceeding 25%. I am pleased to report that 2024 is off to a strong start and that we remain well positioned for sustained growth and profitability. We remain laser focused on continuing to deliver outstanding performance and long-term value for our shareholders through the execution of four key objectives in 2024. First, we expect to continue our rapid growth in the GLP-1 supported weight loss market. As stated earlier, our weight management program has grown from nothing when we started in April 2023 to over 22,000 active patient subscribers by year-end 2023 and over 35,000 subscribers as of today. Our tremendous growth, which continues to accelerate in pace, is largely attributable to our highly differentiated service-based offerings. leveraging our primary care platform to provide our weight management patients comprehensive end-to-end care for their weight loss goals. Early retention results continue to be impressive, with over 80% of patients who start therapy remaining on therapy after 90 days. Economics for these patient groups remain very strong, with day one net revenue over ad spend exceeding 1x. while daily acquisition volumes have continued to trend up as we scale our medical, operations, and patient services groups to create additional appointment capacity. We continue to make significant investments in these areas, as well as in our technology platform, to meet the needs of this market where demand continues to outstrip supply. Second, we remain focused on continuing to grow our more mature lifestyle healthcare business led by RexMD's consistent double-digit growth rates while maintaining its high contribution margins. Since launching in December 2019, RexMD has grown to become one of the most trusted and largest men's health brands in telemedicine. To date, this has largely been achieved through growth in our men's sexual health market. We expect continued double-digit growth in this market while also introducing complementary new products designed not only to capture share in adjacent markets, but to provide substantial cross-sell opportunities for our existing RECS patients. Over 160,000 and growing RECS patients tend to be well established in their lives with ample disposable income, and they appreciate the quality of care they receive from LifeMD-affiliated providers. The investments we are making in product and operational expansion will only serve to elevate our market share and enhance the experience we deliver. Third, we have made and will continue to make significant progress in building our infrastructure to accept reimbursement from private and government payers for medical services provided by our affiliated medical group. Over the past several quarters, we have successfully enrolled our medical group in 10 major health plans, spanning seven of the 10 states we were initially focused on. As part of this effort, we have built out a best-in-class compliance program for both private payer reimbursement and Medicare, and have made significant enhancements to our technology platform to support this program. While we are slightly delayed from our initial timeline, largely due to resources being focused on meeting the outsized demand we've had in our weight management business, this initiative remains a top priority for us. We are now expecting to turn this on by the middle of 2024. We will start with a select group of our largest states and those states' largest carriers where we have enrolled our affiliated medical group and expect to expand this to all 50 states over the next 18 months. We believe that allowing our patients to use their insurance to offset the cost of our virtual and in-home care services will accelerate demand for our service offering and drive better retention. Our fourth key initiative is maintaining our laser focus on delivering growth levels above our 2024 guidance while continuing to drive profitability margins. In 2023, we made sizable progress in this area, growing our adjusted EBITDA from a loss of $14 million in 2022 to a profit of $12 million in 2023. More importantly, our cash flow from operations grew to almost $9 million in 2023, versus negative cash flow from operations of $23 million in 2022. We also ended the year with our strongest balance sheet yet, with more than $33 million of cash. As we guided in January, we expect both our top line and bottom line results to improve substantially in 2024, and we remain focused on turning our telehealth business profitable on a standalone basis by the middle of 2024. Lastly, WorkSimply continues to deliver strong financial results, finishing 2023 with 50% year-over-year growth and adjusted EBITDA margins exceeding 25%. This self-managed business continues to be a meaningful contributor to Life&B's overall profitability and positive cash flow. WorkSimply has recently pivoted their offering from a mostly PDF and some HR solutions business into a diversified workplace and document services business for consumers and small businesses. In doing so, the business has also refocused its marketing and retention efforts on domestic and global markets that produce the highest revenue per user relative to ad spend. In doing so, WorkSimply's active subscriber count has declined slightly year over year, but their unit economics have continued to improve, which has, in turn, supported sizable growth, and improving bottom line margins. In short, there is a lot to be excited about in 2024 for shareholders. And with that, I'll turn the call over to our CFO, Mark Benethen, who will provide a summary of our financial results. Mark?

Thank you, Justin, and good afternoon, everyone. LifeMD had record fourth quarter performance on both the top and bottom line, with consolidated net revenues growing to $44.9 million and adjusted EBITDA growing to $5.5 million. These figures included the recognition of $5 million of program fees paid by Medifast, less LifeMD-related expenses. Additionally, we ended the quarter with over $33 million in cash and positive free cash flow. In 2023, cash flow from operations was nearly $9 million versus negative $23 million in 2022. We remain in the strongest financial position in the company's history, and are well positioned to execute upon our aggressive growth and profitability plans. In addition, based on the strong start to the year led by performance in our GLP-1 weight management business, we are raising our consolidated revenue guidance to at least $200 million from the previous guidance of $195 to $205 million. Now turning to the results for the fourth quarter of 2023. As I mentioned, consolidated revenues in the fourth quarter totaled $44.9 million, an increase of 60% compared with the same year-ago period. Telehealth net revenues grew 90% versus the year-ago period and 28% sequentially. Net revenues from our weight management business more than doubled sequentially. Subscriber growth remained very strong with the number of telehealth active subscribers increasing 27% to approximately 215,000 while WorkSimply active subscribers contracted 6% to over 158,000, both versus the year-ago period. As Justin mentioned, WorkSimply continued to refocus their marketing and retention efforts on their highest-value customer markets, thus generating materially higher revenue per user and enhanced profitability. The number of weight management active subscribers grew to over 22,000 as of year-end 2023, and ahead of our previous guidance of 20,000 active patient subscribers by year end. Consolidated gross margin for the fourth quarter was 88.1%, up 260 basis points versus the prior year period. Gross profit for the quarter totaled $39.5 million, an increase of 64% from the year-ago period. Operating expenses for the fourth quarter totaled $41.7 million, an increase of $7.3 million versus the year of growth period, largely due to a $3 million increase in discretionary selling, marketing, clinical, and patient care expenses to support the rapid growth of our weight management program, expenses to support the launch of the MetaFast partnership, and a $2.5 million increase in non-cash expenses for stock-based compensation and depreciation and amortization. Net of these items operating expenses were up only $1 million or 3% year over year. Our gap net loss attributable to common stockholders for the fourth quarter totaled $4.5 million or a loss of $0.12 per share. This compares to a gap net loss attributable to common stockholders of $12.7 million or a loss of $0.40 per share in the fourth quarter of 2022. Adjusted EPS is a non-GAAP financial measure that excludes interest, taxes, non-cash expenses, dividends, stocks and insurance acceptance readiness, litigation, non-controlling interests, M&A, financing transaction costs, and foreign currency translation. Reflecting those adjustments, adjusted diluted EPS for the fourth quarter of 2023 was $0.15 per share compared with $0.02 in the same year-ago period. Adjusted EBITDA, which is a non-GAAP financial measure that excludes the same items I noted for adjusted EPS, totaled $5.5 million in the fourth quarter of 2023. This compares with adjusted EBITDA of $1 million in the same year-ago quarter. Now turning to the results for the full year of 2023. Consolidated revenues for 2023 were $152.5 million, an increase of 28% compared to 2022. Telehealth net revenues grew 19% versus the prior year, while work simply revenues grew 50%. Gross margin for the full year was 87.6%, up 330 basis points for 2022. Gross profit for the year totaled $133.6 million, an increase of 33% from 2022. Our gap net loss attributable to common stockholders for full year 2023 totaled $23.7 million, or a loss of $0.70 per share. This compares to a gap net loss attributable to common stockholders of $48.6 million, or a loss of $1.57 per share in 2022. Reflecting the same adjustments as I mentioned in the fourth quarter results, adjusted EPS for 2023 was $0.35 per share, compared with a loss of $0.45 per share in 2022. Adjusted EBITDA, a non-GAAP financial measure that excludes the same items I noted for adjusted EPS, totaled $12 million in 2023. This compares with an adjusted EBITDA loss of $14 million in 2022. Cash totaled $33.1 million as of December 31, 2023. As mentioned earlier, we are raising our 2024 guidance for consolidated net revenues to at least 200 million, while reaffirming our adjusted EBITDA guidance of between 18 and 22 million. This wraps up our financial results. I'd now like to turn the call back over to Justin.