MTBC Reports First Quarter 2017 Results and Reaffirms 2017
Guidance
Company Reports 61% Quarterly Revenue Growth
SOMERSET, NJ-(Marketwired - May 10, 2017) - Medical
Transcription Billing, Corp. (NASDAQ: MTBC) (NASDAQ: MTBCP)
- Revenue of $8.2 million for the quarter, 61% growth over first
quarter 2016
- GAAP net loss of $2.7 million, a 33% reduction from fourth
quarter 2016
- Non-GAAP adjusted net income of ($852,000), or ($0.08) per
share for the quarter
- Adjusted EBITDA of ($313,000) for the quarter, a 62% reduction
from fourth quarter 2016
Medical Transcription Billing, Corp. (NASDAQ: MTBC) (NASDAQ:
MTBCP), a leading provider of proprietary, cloud-based electronic
health records, practice management and mHealth solutions, today
announced financial and operational results for first quarter 2017
and reaffirmed guidance for fiscal year 2017. The company's
management will conduct a conference call later today, Wednesday,
May 10, 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 a second consecutive quarter with
greater than 60% year-over-year revenue growth," said Mahmud Haq,
MTBC Chairman and Chief Executive Officer. "Even more exciting is
the fact that our GAAP net loss improved by 33% and our adjusted
EBITDA showed a 62% improvement, both as compared to the fourth
quarter 2016. As we have reduced expenses from our 2016
acquisitions, we are seeing improvements in our profit margins, and
are on track to achieve positive adjusted EBITDA in the second
quarter and full year 2017."
"Having recently completed most of our acquisition-related cost
rationalization, and with our organic growth initiatives producing
promising results, we look forward to demonstrating the earnings
capabilities of our business model," said Stephen Snyder, MTBC
President. He continued, "We're pleased that our growth efforts are
yielding positive results - and we believe that the nationwide
rollout of talkEHR™, our game-changing SaaS electronic health
record solution, will further accelerate organic growth."
Three Months Financial Results
Revenues for first quarter 2017 were $8.2 million, an increase
of 61% compared to $5.1 million in the same period last year. The
increase was primarily due to the MediGain acquisition.
The first quarter 2017 GAAP net loss was $2.7 million, 33% of
net revenue, compared to a GAAP net loss of $2.0 million in the
same period last year. The GAAP net loss is largely a result of
non-cash amortization and depreciation expense of $1.5 million, and
increased primarily as a result of the MediGain acquisition.
Depreciation and amortization increased by $306,000 or 25% due
to the MediGain acquisition. The increase in net loss is also
partly due to restructuring charges of $276,000 recorded during the
first quarter 2017. We have now closed our offices in Poland and
Bangalore, India and shifted the work to our teams in Pakistan and
Sri Lanka, to gain operating efficiencies. In addition, our
interest costs increased from $141,000 to $279,000, due to higher
debt balances.
"The first quarter 2017 GAAP net loss represents a decrease of
$1.3 million from the $4.0 million net loss in our prior quarter,
as a result of significant cost savings during our first six months
after acquiring MediGain," said Bill Korn, MTBC Chief Financial
Officer. "Our direct operating costs were reduced by $901,000 or
15% quarter-over-quarter, largely by eliminating expensive
subcontractors and moving work to high-quality, cost-effective
offshore employees, and our general & administrative expenses
were reduced by $1.3 million or 30% quarter-over-quarter due to
reduced transaction costs and stock-based compensation expenses,
and by closing expensive offices. In addition to these expense
reductions, which will continue in future periods, there were
additional savings achieved during the first quarter of 2017 which
will be fully reflected in our second quarter 2017 results."
The GAAP net loss for first quarter 2017 was $0.29 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 for first quarter 2017 was
($852,000), or ($0.08) per share, compared to the non-GAAP adjusted
net income of ($217,000) 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 first quarter 2017 was ($313,000), or (3.8%)
of revenue, compared to adjusted EBITDA of $65,000, or 1.3% of
revenue, in the same period last year.
"The first quarter 2017 adjusted EBITDA represents an
improvement of $500,000 or 62% from the ($813,000) adjusted EBITDA
in our prior quarter, which reflects the significant cost savings
during our first six months after acquiring MediGain," continued
Bill Korn. "The negative adjusted EBITDA during fourth quarter 2016
and first quarter 2017 were anticipated due to the MediGain
acquisition, as we anticipated that it would take six months to
wring out sufficient excess costs to turn the newly acquired
business profitable. We anticipate a return to positive adjusted
EBITDA starting next quarter, and since our business now has a
higher scale, we anticipate the ability to spread our fixed
expenses over a larger revenue base and generate larger adjusted
EBITDA than we ever have before."
"The difference of $2.4 million between adjusted EBITDA and the
GAAP net loss in the first quarter of 2017 reflects $1.5 million of
non-cash amortization and depreciation expense, $129,000 of
stock-based compensation, $459,000 of integration and transaction
costs and restructuring charges related to recent acquisitions,
$60,000 of provision for taxes, and $276,000 of net interest
expense, offset by a $11,000 decrease in the contingent
consideration liability," says Bill Korn. Management believes that
our non-GAAP metrics are closer to reflecting our operating cash
flow, and we will focus on driving positive adjusted EBITDA during
2017.
2017 Full Year Guidance
MTBC is reiterating the following forward-looking guidance for
the fiscal year ending December 31, 2017:
For the Fiscal Year Ending December 31, 2017 Forward-Looking
Guidance
|
Revenue
|
$30 - $31 million
|
Adjusted EBITDA
|
$2.0 - $2.5 million
|
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 second quarter 2017 will return
to positive adjusted EBITDA, and each successive quarter will be
positive and reflect growth.
Cash Balance and Liquidity
As of March 31, 2017, the Company had $1.2 million in cash and a
working capital deficiency of approximately $9.6 million. The
Company's stockholders' equity was approximately $4.2 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.
MTBC Common Stock
MTBC's common stock has recorded a closing bid at or above $1.00
per share for the last 10 trading days. It is likely that we will
receive notification from Nasdaq that we are in compliance with
their minimum listing requirements, and this will avert the need to
effect a reverse stock split.
Conference Call Information
MTBC management will host a conference call at 8:30 a.m. EDT on
Wednesday, May 10, 2017, to discuss the first quarter 2017 results.
The conference call will be accessible by dialing 844-802-2438, or
412-317-5131 for international callers, and referencing "MTBC First
Quarter 2017 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 September 30, 2017. The replay can be accessed by dialing
877-344-7529, or 412-317-0088 for international callers, and
providing access code 10105457.
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.
Follow MTBC on Twitter, LinkedIn and Facebook.
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.
|
|
MEDICAL TRANSCRIPTION BILLING, CORP.
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
December 31,
|
|
|
2017
|
|
|
2016
|
|
|
(Unaudited)
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
|
Cash
|
$
|
1,249,850
|
|
|
$
|
3,476,880
|
|
|
Accounts receivable - net of allowance for doubtful accounts of
$272,000 and $156,000 at March 31, 2017 and December 31, 2016,
respectively
|
|
3,917,773
|
|
|
|
4,330,901
|
|
|
Current assets - related party
|
|
13,200
|
|
|
|
13,200
|
|
|
Prepaid expenses and other current assets
|
|
531,186
|
|
|
|
618,501
|
|
|
|
Total current assets
|
|
5,712,009
|
|
|
|
8,439,482
|
|
Property and equipment - net
|
|
1,526,952
|
|
|
|
1,588,937
|
|
Intangible assets - net
|
|
4,569,773
|
|
|
|
5,833,706
|
|
Goodwill
|
|
12,178,868
|
|
|
|
12,178,868
|
|
Other assets
|
|
384,657
|
|
|
|
282,713
|
|
TOTAL ASSETS
|
$
|
24,372,259
|
|
|
$
|
28,323,706
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts payable
|
$
|
1,756,410
|
|
|
$
|
1,905,131
|
|
|
Accrued compensation
|
|
1,692,412
|
|
|
|
2,009,911
|
|
|
Accrued expenses
|
|
1,306,964
|
|
|
|
1,236,609
|
|
|
Deferred rent (current portion)
|
|
62,225
|
|
|
|
61,437
|
|
|
Deferred revenue (current portion)
|
|
26,207
|
|
|
|
41,666
|
|
|
Accrued liability to related party
|
|
16,626
|
|
|
|
16,626
|
|
|
Borrowings under line of credit
|
|
2,000,000
|
|
|
|
2,000,000
|
|
|
Current portion of long-term debt
|
|
2,666,667
|
|
|
|
2,666,667
|
|
|
Notes payable - other (current portion)
|
|
5,099,971
|
|
|
|
5,181,459
|
|
|
Contingent consideration (current portion)
|
|
506,961
|
|
|
|
535,477
|
|
|
Dividend payable
|
|
202,579
|
|
|
|
202,579
|
|
|
|
Total current liabilities
|
|
15,337,022
|
|
|
|
15,857,562
|
|
Long - term debt, net of discount and debt issuance costs
|
|
3,422,820
|
|
|
|
4,033,668
|
|
Notes payable - other
|
|
149,252
|
|
|
|
166,184
|
|
Deferred rent
|
|
416,425
|
|
|
|
433,186
|
|
Deferred revenue
|
|
27,027
|
|
|
|
26,673
|
|
Contingent consideration
|
|
387,750
|
|
|
|
394,072
|
|
Deferred tax liability
|
|
399,530
|
|
|
|
345,530
|
|
Total liabilities
|
|
20,139,826
|
|
|
|
21,256,875
|
|
COMMITMENTS AND CONTINGENCIES (Note 9)
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.001 per share - authorized
2,000,000 shares; issued and outstanding 294,656 shares at March
31, 2017 and December 31, 2016
|
|
295
|
|
|
|
295
|
|
|
Common stock, $0.001 par value - authorized 19,000,000 shares;
issued 10,915,685 and 10,792,352 shares at March 31, 2017 and
December 31, 2016, respectively; outstanding, 10,174,886 and
10,051,553 shares at March 31, 2017 and December 31, 2016,
respectively
|
|
10,916
|
|
|
|
10,793
|
|
|
Additional paid-in capital
|
|
25,954,149
|
|
|
|
26,038,063
|
|
|
Accumulated deficit
|
|
(20,652,175
|
)
|
|
|
(17,944,230
|
)
|
|
Accumulated other comprehensive loss
|
|
(418,752
|
)
|
|
|
(376,090
|
)
|
|
Less: 740,799 common shares held in treasury, at cost at March
31, 2017 and December 31, 2016
|
|
(662,000
|
)
|
|
|
(662,000
|
)
|
|
Total shareholders' equity
|
|
4,232,433
|
|
|
|
7,066,831
|
|
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
24,372,259
|
|
|
$
|
28,323,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
|
2016
|
|
NET REVENUE
|
$
|
8,220,074
|
|
|
$
|
5,109,849
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
Direct operating costs
|
|
5,222,736
|
|
|
|
2,301,379
|
|
|
Selling and marketing
|
|
355,511
|
|
|
|
343,541
|
|
|
General and administrative
|
|
2,986,663
|
|
|
|
2,909,838
|
|
|
Research and development
|
|
280,849
|
|
|
|
190,786
|
|
|
Change in contingent consideration
|
|
(11,188
|
)
|
|
|
(44,753
|
)
|
|
Depreciation and amortization
|
|
1,519,545
|
|
|
|
1,213,510
|
|
|
Restructuring charges
|
|
275,628
|
|
|
|
-
|
|
|
|
Total operating expenses
|
|
10,629,744
|
|
|
|
6,914,301
|
|
OPERATING LOSS
|
|
(2,409,670
|
)
|
|
|
(1,804,452
|
)
|
OTHER:
|
|
|
|
|
|
|
|
|
Interest income
|
|
3,421
|
|
|
|
7,076
|
|
|
Interest expense
|
|
(279,425
|
)
|
|
|
(141,358
|
)
|
|
Other income (expense) - net
|
|
38,031
|
|
|
|
(2,072
|
)
|
LOSS BEFORE INCOME TAXES
|
|
(2,647,643
|
)
|
|
|
(1,940,806
|
)
|
Income tax provision
|
|
60,302
|
|
|
|
42,780
|
|
NET LOSS
|
$
|
(2,707,945
|
)
|
|
$
|
(1,983,586
|
)
|
|
|
|
|
|
|
|
|
Preferred stock dividend
|
|
202,579
|
|
|
|
159,236
|
|
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
$
|
(2,910,524
|
)
|
|
$
|
(2,142,822
|
)
|
Loss per common share:
|
|
|
|
|
|
|
|
Basic and diluted loss per share
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
Weighted-average basic and diluted shares outstanding
|
|
10,172,108
|
|
|
|
10,084,928
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MEDICAL TRANSCRIPTION BILLING, CORP.
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
|
FOR THE THREE MONTHS ENDED MARCH 31, 2017 AND 2016
|
|
|
|
|
|
|
|
|
2017
|
|
|
2016
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net loss
|
$
|
(2,707,945
|
)
|
|
$
|
(1,983,586
|
)
|
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
1,519,545
|
|
|
|
1,213,510
|
|
|
|
Deferred rent
|
|
(12,556
|
)
|
|
|
(9,399
|
)
|
|
|
Deferred revenue
|
|
(15,105
|
)
|
|
|
(14,034
|
)
|
|
|
Provision for doubtful accounts
|
|
164,745
|
|
|
|
21,941
|
|
|
|
Foreign exchange (gain) loss
|
|
(30,646
|
)
|
|
|
26,935
|
|
|
|
Interest accretion on debt
|
|
55,819
|
|
|
|
41,753
|
|
|
|
Non-cash restructuring charges
|
|
17,001
|
|
|
|
-
|
|
|
|
Stock-based compensation expense
|
|
129,347
|
|
|
|
489,422
|
|
|
|
Change in contingent consideration
|
|
(11,188
|
)
|
|
|
(44,753
|
)
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
248,383
|
|
|
|
(237,570
|
)
|
|
|
|
Other assets
|
|
86,883
|
|
|
|
30,882
|
|
|
|
|
Accounts payable and other liabilities
|
|
(311,732
|
)
|
|
|
61,272
|
|
|
|
|
|
Net cash used in operating activities
|
|
(867,449
|
)
|
|
|
(403,627
|
)
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(212,117
|
)
|
|
|
(102,646
|
)
|
|
|
Cash paid for acquisitions
|
|
-
|
|
|
|
(1,250,000
|
)
|
|
|
|
|
Net cash used in investing activities
|
|
(212,117
|
)
|
|
|
(1,352,646
|
)
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Contingent consideration payments
|
|
(23,650
|
)
|
|
|
-
|
|
|
|
Proceeds from long term debt, net of costs
|
|
-
|
|
|
|
1,908,141
|
|
|
|
Repayments of debt obligations
|
|
(764,791
|
)
|
|
|
(237,777
|
)
|
|
|
Proceeds from line of credit
|
|
-
|
|
|
|
2,000,000
|
|
|
|
Repayments of line of credit
|
|
-
|
|
|
|
(2,000,000
|
)
|
|
|
Registration statement and bank costs
|
|
(126,217
|
)
|
|
|
(20,000
|
)
|
|
|
Preferred stock dividends paid
|
|
(202,579
|
)
|
|
|
(159,236
|
)
|
|
|
Purchase of common shares
|
|
-
|
|
|
|
(427,123
|
)
|
|
|
|
|
Net cash (used in) provided by financing activities
|
|
(1,117,237
|
)
|
|
|
1,064,005
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH
|
|
(30,227
|
)
|
|
|
19,808
|
|
|
NET DECREASE IN CASH
|
|
(2,227,030
|
)
|
|
|
(672,460
|
)
|
|
CASH - Beginning of the period
|
|
3,476,880
|
|
|
|
8,039,562
|
|
|
CASH - End of period
|
$
|
1,249,850
|
|
|
$
|
7,367,102
|
|
|
SUPPLEMENTAL NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Vehicle financing obtained
|
$
|
-
|
|
|
$
|
91,110
|
|
|
|
Contingent consideration resulting from acquisitions
|
$
|
-
|
|
|
$
|
430,000
|
|
|
|
Dividends declared, not paid
|
$
|
202,579
|
|
|
$
|
159,236
|
|
SUPPLEMENTAL INFORMATION - Cash paid during the period for:
|
|
|
|
Income taxes
|
$
|
8,017
|
|
|
$
|
16,420
|
|
|
|
Interest
|
$
|
129,549
|
|
|
$
|
89,495
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO COMPARABLE GAAP MEASURES (UNAUDITED)
The following is a reconciliation of the non-GAAP financial
measures used by us to describe our financial results determined in
accordance with accounting principles generally accepted in the
United States of America ("GAAP"). An explanation of these measures
is also included below under the heading "Explanation of Non-GAAP
Financial Measures."
While management believes that these non-GAAP financial measures
provide useful supplemental information to investors regarding the
underlying performance of our business operations, investors are
reminded to consider these non-GAAP measures in addition to, and
not as a substitute for, financial performance measures prepared in
accordance with GAAP. In addition, it should be noted that these
non-GAAP financial measures may be different from non-GAAP measures
used by other companies, and management may utilize other measures
to illustrate performance in the future. Non-GAAP measures have
limitations in that they do not reflect all of the amounts
associated with our results of operations as determined in
accordance with GAAP.
Adjusted EBITDA
Set forth below is a reconciliation of our "adjusted EBITDA" to
our GAAP net loss.
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
|
2016
|
|
|
($ in thousands)
|
|
Net revenue
|
$
|
8,220
|
|
|
$
|
5,110
|
|
|
|
|
|
|
|
|
|
GAAP net loss
|
$
|
(2,708
|
)
|
|
$
|
(1,984
|
)
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
60
|
|
|
|
43
|
|
|
Net interest expense
|
|
276
|
|
|
|
134
|
|
|
Other (income) expense - net
|
|
(38
|
)
|
|
|
2
|
|
|
Stock-based compensation expense
|
|
129
|
|
|
|
489
|
|
|
Depreciation and amortization
|
|
1,520
|
|
|
|
1,214
|
|
|
Integration and transaction costs
|
|
459
|
|
|
|
212
|
|
|
Change in contingent consideration
|
|
(11
|
)
|
|
|
(45
|
)
|
Adjusted EBITDA
|
$
|
(313
|
)
|
|
$
|
65
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted Net Income
Set forth below is a reconciliation of our non-GAAP "adjusted
net income" and non-GAAP "adjusted net income per share" to our
GAAP net loss and GAAP net loss per share.
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
GAAP net loss
|
$
|
(2,708
|
)
|
|
$
|
(1,984
|
)
|
|
|
|
|
|
|
|
|
|
Other (income) expense - net
|
|
(38
|
)
|
|
|
2
|
|
|
Stock-based compensation expense
|
|
129
|
|
|
|
489
|
|
|
Amortization of purchased intangible assets
|
|
1,263
|
|
|
|
1,072
|
|
|
Integration and transaction costs
|
|
459
|
|
|
|
212
|
|
|
Change in contingent consideration
|
|
(11
|
)
|
|
|
(45
|
)
|
|
Tax effect
|
|
-
|
|
|
|
-
|
|
|
Income tax expense related to goodwill
|
|
54
|
|
|
|
37
|
|
Non-GAAP adjusted net income
|
$
|
(852
|
)
|
|
$
|
(217
|
)
|
|
|
|
|
|
|
|
|
For purposes of determining non-GAAP adjusted net income per
share, we used the number of common shares outstanding at the end
of the period on March 31, 2017 and 2016 including the shares which
were issued but are considered contingent consideration, in order
to provide insight into results considering the total number of
shares which were issued at the time of the acquisitions.
|
|
|
|
Three Months Ended
|
|
|
March 31,
|
|
|
2017
|
|
|
2016
|
|
GAAP net loss per share
|
$
|
(0.29
|
)
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
|
|
|
GAAP net loss per end-of-period share
|
|
(0.26
|
)
|
|
|
(0.19
|
)
|
|
Other (income) expense - net
|
|
0.00
|
|
|
|
0.00
|
|
|
Stock-based compensation expense
|
|
0.01
|
|
|
|
0.05
|
|
|
Amortization of purchased intangible assets
|
|
0.12
|
|
|
|
0.10
|
|
|
Integration and transaction costs
|
|
0.04
|
|
|
|
0.02
|
|
|
Change in contingent consideration
|
|
0.00
|
|
|
|
0.00
|
|
|
Income tax expense related to goodwill
|
|
0.01
|
|
|
|
0.00
|
|
Non-GAAP adjusted net income per share
|
$
|
(0.08
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
|
End-of-period shares
|
|
10,423,511
|
|
|
|
10,299,343
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
2017
|
|
2016
|
Basic shares outstanding
|
10,174,886
|
|
10,050,718
|
Shares recorded as contingent consideration
|
248,625
|
|
248,625
|
End-of-period shares
|
10,423,511
|
|
10,299,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Explanation of Non-GAAP Financial Measures
We report our financial results in accordance with accounting
principles generally accepted in the United States of America, or
GAAP. However, management believes that, in order to properly
understand our short-term and long-term financial and operational
trends, investors may wish to consider the impact of certain
non-cash or non-recurring items, when used as a supplement to
financial performance measures in accordance with GAAP. These items
result from facts and circumstances that vary in frequency and
impact on continuing operations. Management also uses results of
operations before such items to evaluate the operating performance
of MTBC and compare it against past periods, make operating
decisions, and serve as a basis for strategic planning. These
non-GAAP financial measures provide management with additional
means to understand and evaluate the operating results and trends
in our ongoing business by eliminating certain non-cash expenses
and other items that management believes might otherwise make
comparisons of our ongoing business with prior periods more
difficult, obscure trends in ongoing operations, or reduce
management's ability to make useful forecasts. Management believes
that these non-GAAP financial measures provide additional means of
evaluating period-over-period operating performance. In addition,
management understands that some investors and financial analysts
find this information helpful in analyzing our financial and
operational performance and comparing this performance to our peers
and competitors.
Management uses adjusted EBITDA and non-GAAP adjusted net income
to provide an understanding of aspects of operating results before
the impact of investing and financing charges and income taxes.
Adjusted EBITDA may be useful to an investor in evaluating our
operating performance and liquidity because this measure excludes
non-cash expenses as well as expenses pertaining to investing or
financing transactions. Management defines "adjusted EBITDA" as the
sum of GAAP net income (loss) before provision for (benefit from)
income taxes, net interest expense, other (income) expense,
stock-based compensation expense, depreciation and amortization,
amortization of purchased intangible assets, integration costs,
transaction costs, and changes in contingent consideration.
Management defines "non-GAAP adjusted net income" as the sum of
GAAP net income (loss) before stock-based compensation expense,
amortization of purchased intangible assets, other (income)
expense, transaction costs, integration costs, changes in
contingent consideration, any tax impact related to these preceding
items and income tax expense related to goodwill, and "non-GAAP
adjusted net income per share" as non-GAAP adjusted net income
divided by common shares outstanding at the end of the period,
including the shares which were issued but are subject to
forfeiture and considered contingent consideration. Management
considers all of these non-GAAP financial measures to be important
indicators of our operational strength and performance of our
business and a good measure of our historical operating trends, in
particular the extent to which ongoing operations impact our
overall financial performance.
In addition to items routinely excluded from non-GAAP EBITDA,
management excludes or adjusts each of the items identified below
from the applicable non-GAAP financial measure referenced above for
the reasons set forth with respect to that excluded item:
Other (income) expense - net. Other (income) expense is
excluded because foreign currency gains and losses, whether
realized or unrealized, and other non-operating expenses are
non-cash expenditures that management does not consider part of
ongoing operating results when assessing the performance of our
business, and also because the total amount of the expense is
partially outside of our control. Foreign currency gains and losses
are based on global market factors which are unrelated to our
performance during the period in which the gains and losses are
realized.
Stock-based compensation expense. Stock-based
compensation expense is excluded because this is primarily a
non-cash expenditure that management does not consider part of
ongoing operating results when assessing the performance of our
business, and also because the total amount of the expenditure is
partially outside of our control because it is based on factors
such as stock price, volatility, and interest rates, which may be
unrelated to our performance during the period in which the
expenses are incurred. Stock-based compensation expense includes
customer incentives paid in stock and related fees, as well as
cash-settled awards based on changes in the stock price.
Amortization of purchased intangible assets. Purchased
intangible assets are amortized over their estimated useful lives
and generally cannot be changed or influenced by management after
the acquisition. Accordingly, this item is not considered by
management in making operating decisions. Management does not
believe such charges accurately reflect the performance of our
ongoing operations for the period in which such charges are
incurred.
Transaction costs. Transaction costs are upfront costs
related to acquisitions and related transactions, such as brokerage
fees, pre-acquisition accounting costs and legal fees, and other
upfront costs related to specific transactions. Management believes
that such expenses do not have a direct correlation to future
business operations, and therefore, these costs are not considered
by management in making operating decisions. Management does not
believe such charges accurately reflect the performance of our
ongoing operations for the period in which such charges are
incurred.
Integration costs. Integration costs are severance
payments for certain employees relating to our acquisitions and
exit costs related to terminating leases and other contractual
agreements, and restructuring charges arising from discontinued
operations. Accordingly, management believes that such expenses do
not have a direct correlation to future business operations, and
therefore, these costs are not considered by management in making
operating decisions. Management does not believe such charges
accurately reflect the performance of our ongoing operations for
the period in which such charges are incurred.
Changes in contingent consideration. Contingent
consideration represents the amount payable to the sellers of the
acquired businesses based on the achievement of defined performance
measures contained in the purchase agreements. Contingent
consideration is adjusted to fair value at the end of each
reporting period, and changes arise from changes in MTBC's stock
price as well as changes in the forecasted revenues of the acquired
businesses.
Tax expense related to goodwill. Income tax expense
resulting from the amortization of goodwill related to our
acquisitions represents a charge to record the tax expense
resulting from amortizing goodwill over 15 years for tax purposes.
Goodwill is not amortized for GAAP reporting. This expense is not
anticipated to result in a cash payment.
Disclaimer:
This press release is for information purposes only, and does
not constitute an offer to sell or solicitation of an offer to buy,
nor shall there be any sale of these securities in any state or
other jurisdiction in which such offer, solicitation or sale would
be unlawful prior to the registration or qualification under the
securities laws of such state or jurisdiction.
SOURCE MTBC
Company and Investor Contact: Bill Korn Chief Financial Officer
Medical Transcription Billing, Corp. bkorn@mtbc.com
732-873-5133
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