MTBCP CareCloud Inc

Company Reports 65% Quarterly Revenue Growth

SOMERSET, NJ-(Marketwired - Mar 31, 2017) -

Fourth Quarter 2016 Financial Results:

• Revenue of $8.8 million for fourth quarter 2016, 65% growth over fourth quarter 2015
• GAAP net loss of $4.0 million, or $0.42 per share
• Non-GAAP adjusted net income of ($1.3 million), or ($0.12) per share for the quarter
• Adjusted EBITDA of ($814,000) or (9.2%) of revenue for the quarter

Full Year 2016 Financial Results:

• Revenue of $24.5 million for the year, 6% growth over 2015
• GAAP net loss of $8.8 million, or $0.95 per share
• Non-GAAP adjusted net income of ($2.0 million) or ($0.19) per share for the year
• Adjusted EBITDA of ($605,000) or (2.5%) of revenue for the year

Medical Transcription Billing, Corp. (NASDAQ: MTBC) (NASDAQ: MTBCP), a leading provider of proprietary, cloud-based electronic health records, practice management and mHealth solutions, today announces financial and operational results for fiscal year 2016 and fourth quarter 2016 and provides a review of its most recent and largest acquisition to-date. We will conduct a conference call later today, Friday, March 31, 2017, at 8:30 a.m. Eastern Time to discuss these results and management's outlook for future financial and operational performance.

"We are pleased to announce 65% revenue growth over the fourth quarter of 2015 as well as 65% growth over the third quarter of 2016, and our third consecutive quarter of quarter-over-quarter revenue growth," says Mahmud Haq, MTBC's Chairman and CEO. He continued, "We are greatly encouraged by the growth opportunities provided by our recent acquisition and look forward to delivering strong revenue and EBITDA growth in 2017."

As previously announced, on October 3, 2016 MTBC achieved a corporate milestone in its acquisition of substantially all of the assets of MediGain, LLC, a Texas-based medical billing company, and its subsidiary, Millennium Practice Management, LLC, a New Jersey-based medical billing company (together, "MediGain"). Expected to be accretive to shareholders in 2017, the acquisition reflects the strategic nature of MTBC's acquisition-based growth strategy.

Fourth quarter 2016 financial results

Revenues for three months ended December 31, 2016 were $8.8 million, compared to $5.4 million in the same period last year, which represents 65% revenue growth over the fourth quarter of 2015. The increase was primarily a result of the MediGain acquisition, which occurred on October 3, 2016.

The fourth quarter 2016 GAAP net loss was $4.0 million, or 46% of net revenue, compared to a GAAP net loss of $802,000 for the same period last year. The increase in the net loss is primarily the result of planned, short-term increases in operating expenses related to the acquisition and integration of MediGain. According to Bill Korn, Chief Financial Officer, "Fourth quarter revenue increased by $3.5 million or 65%, while direct operating costs increased from $2.4 million in the fourth quarter 2015 to $6.1 million in the fourth quarter 2016, and general and administrative expenses increased from $2.6 million to $4.3 million."

"On October 3, 2016, the day we purchased MediGain, we began reducing expenses. For example, MediGain's four subcontractor firms represented $750,000 of the fourth quarter 2016 direct operating expense, and as of today, we have transitioned all work from these subcontractor firms to our employees. These transitions significantly reduced our operating expense, while improving performance. We have also been deploying our experienced team and technology to reduce personnel and related operating expense. Finally, we have reduced the facilities costs associated with MediGain by approximately 70%."

The GAAP net loss for fourth quarter was $0.42 per share, calculated using the net loss attributable to common shareholders divided by the weighted average number of common shares outstanding.

Non-GAAP adjusted net income of fourth quarter was ($1.3 million), or ($0.12) per share, compared to the non-GAAP adjusted net income of $121,000 in the same period last year. Non-GAAP adjusted net income per share is calculated using the end-of-period common shares outstanding, including shares which are part of contingent consideration.

Adjusted EBITDA for the fourth quarter was ($814,000) or (9.2%) of revenue, compared to adjusted EBITDA of $312,000, or 5.8% of revenue, in the same period last year.

Full year 2016 financial results

MTBC's revenues for the year ended December 31, 2016 were $24.5 million, compared to $23.1 million last year, an increase of 6%.

GAAP net loss for the year ended December 31, 2016 was $8.8 million, 36% of net revenue, or $0.95 per share, compared to a GAAP net loss of $4.7 million last year. The net loss for 2016 includes $5.1 million of non-cash depreciation and amortization expense, primarily the result of amortizing purchased intangible assets.

The increase in the net loss is primarily the result of an increase in operating expenses due to the acquisition of MediGain during the fourth quarter of 2016.

Non-GAAP adjusted net income for the year ended December 31, 2016 was ($2.0 million), or ($0.19) per share, compared to the non-GAAP adjusted net income of ($1.4 million) last year.

Adjusted EBITDA for the year ended December 31, 2016 was ($605,000), or (2.5%) of revenue, compared to adjusted EBITDA of ($675,000), or (2.9%) of revenue, last year.

"The difference of $8.2 million between adjusted EBITDA and the GAAP net loss in the year 2016 reflects $5.1 million of non-cash amortization and depreciation expense, $1.9 million of stock-based compensation, $1.0 million of integration and transaction costs related to recent acquisitions, $197,000 of provision for taxes, and $646,000 of net interest expense, offset by a $716,000 decrease in the contingent consideration liability," says Bill Korn. Management believes that our non-GAAP metrics are closer to reflecting our cash flow, and we will focus on driving positive adjusted EBITDA during 2017.

2017 Full Year Guidance

MTBC is providing the following forward-looking guidance for the fiscal year ending December 31, 2017:

The company anticipates full year 2017 revenue of approximately $30 to $31 million, which represents growth of 22% to 27% over 2016 revenue. We expect adjusted EBITDA to be $2.0 to $2.5 million for full year 2017, anticipating that the first quarter will be slightly negative due to planned integration expenses, but each successive quarter will be positive and reflect growth.

Cash Balance and Liquidity

As of December 31, 2016, the Company had $3.5 million in cash and a working capital deficiency of approximately $7.4 million. At year end, the Company's stockholders' equity was approximately $7.1 million and its accumulated deficit was approximately $17.9 million. In order to satisfy its existing obligations, the Company believes additional funding will be necessary, which might be in the form of sales of additional shares of its Series A Preferred Stock, its common stock, or some other instrument. The Company may in the future seek additional capital from public or private offerings of its capital stock or it may elect to borrow additional amounts under new credit lines or from other sources. If the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or debt securities may have rights, preferences and privileges senior to those of its existing stockholders.

Management concluded that without additional financing, there was substantial doubt about the Company's ability to continue as a going concern within twelve months after the date the financial statements were issued. The audit report included in the Company's Annual Report on Form 10-K will contain a going concern emphasis-of-matter paragraph.

Conference Call Information

MTBC management will host a conference call at 8:30 a.m. EDT on Friday, March 31, 2017, to discuss the annual results of 2016. The conference call will be accessible by dialing 844-802-2438, or 412-317-5131 for international callers, and referencing "MTBC Fourth Quarter 2016 Earnings Call." An audio webcast of the call will be available live and archived on MTBC's investor relations website at ir.mtbc.com.

A replay of the conference call will be available approximately one hour after conclusion of the call and will be accessible through June 30, 2017. The replay can be accessed by dialing 877-344-7529, or 412-317-0088 for international callers, and providing access code 10103771.

About MTBC

MTBC is a healthcare information technology company that provides a fully integrated suite of proprietary web-based solutions, together with related business services, to healthcare providers practicing in ambulatory care settings. Our integrated Software-as-a-Service (or SaaS) platform helps our customers increase revenues, streamline workflows and make better business and clinical decisions, while reducing administrative burdens and operating costs. MTBC's common stock trades on the NASDAQ Capital Market under the ticker symbol "MTBC," and its Series A Preferred Stock trades on the NASDAQ Capital Market under the ticker symbol "MTBCP."

For additional information, please visit our website at www.mtbc.com.

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Use of Non-GAAP Financial Measures

In our earnings releases, prepared remarks, conference calls, slide presentations, and webcasts, we may use or discuss non-GAAP financial measures, as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure used or discussed, and a reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure, are included in this press release after the condensed consolidated financial statements. Our earnings press releases containing such non-GAAP reconciliations can be found in the Investor Relations section of our web site at ir.mtbc.com.

Forward-Looking Statements

This press release contains various forward-looking statements within the meaning of the federal securities laws. These statements relate to anticipated future events, future results of operations or future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "might," "will," "should," "intends," "expects," "plans," "goals," "projects," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology.

Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Forward-looking statements in this press release include, without limitation, statements reflecting management's expectations for future financial performance and operating expenditures, expected growth, profitability and business outlook, increased sales and marketing expenses, and the expected results from the integration of our acquisitions.

These forward-looking statements are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties and other factors which may cause our (or our industry's) actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and uncertainties that could have an impact on the forward-looking statements, including without limitation, risks and uncertainties relating to: the Company's ability to manage growth; integrate acquisitions; effectively migrate and keep newly acquired customers and other important risks and uncertainties referenced and discussed under the heading titled "Risk Factors" in the Company's filings with the Securities and Exchange Commission.

The statements in this press release are made as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company does not assume any obligations to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.

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