CareCloud, Inc. (the “Company” or “CareCloud”) (Nasdaq: MTBC)
(Nasdaq: MTBCP), a leader in healthcare technology solutions for
medical practices and health systems nationwide, today announced
financial and operational results for the third quarter ended
September 30, 2021. The Company’s management will conduct a
conference call with related slides today at 8:30 a.m. Eastern Time
to discuss these results and management’s outlook for the year.
Third Quarter
2021 Highlights
- Record revenue
of $38.3 million, 21% growth over Q3 2020
- Record GAAP net
income of $1.5 million, compared to a net loss of $1.7 million in
Q3 2020
- Record adjusted
net income of $6.1 million, or $0.41 per share, growth of 72% over
Q3 2020
- Record adjusted
EBITDA of $6.7 million, an increase of $2.5 million compared to
$4.2 million in Q3 2020
Year-to-date 2021
Highlights
- Revenue of $102.1 million, a 40%
increase from YTD 2020
- GAAP net loss declined to $686,000,
compared to a net loss of $9.0 million in the same period last
year
- Adjusted net income of $13.5
million or $0.91 per share, compared to $3.5 million in the same
period last year
- Adjusted EBITDA of $16.0 million,
an increase of $10.8 million from $5.2 million in the same period
last year
“We are excited to report record revenue of
$38.3 million in the third quarter, a $6.7 million year-over-year
increase,” said A. Hadi Chaudhry, CareCloud’s Chief Executive
Officer and President. “We are on track to achieve another year
with 30% or more year-over-year revenue growth while we more than
double our adjusted EBITDA. That would make 2021 our fifth
consecutive year with over 25% annual revenue growth. We achieved
these record results through a combination of organic growth and
our acquisition of medSR on June 1, 2021, as well as our relentless
focus on reducing costs in our acquired companies to improve our
operating efficiencies.”
“We are very proud to report positive GAAP net
income of $1.5 million this quarter, in addition to a record $6.7
million in adjusted EBITDA, representing our eighteenth consecutive
quarter of positive adjusted EBITDA,” continued Hadi Chaudhry. “We
are pleased to give investors the opportunity to invest in a
company achieving both rapid growth and profitability.”
Third Quarter
2021
Financial Results
Revenue for the third quarter 2021 was a record
$38.3 million, an increase of $6.7 million or 21% from the third
quarter of 2020.
Bill Korn, Chief Financial Officer, commented
“Revenue was a new record for the Company, 12% above our previous
all-time high, set last quarter. Our annualized revenue run rate is
now $150 million, which is 43% above our 2020 revenue and 133%
above our 2019 revenue. This is proof that our strategy of growing
through a combination of organic and strategic growth continues to
allow us to grow revenue significantly faster than the
industry.”
Third quarter 2021 GAAP net income was $1.5
million, as compared to a net loss of $1.7 million in the same
period last year and a net loss of $227,000 in second quarter 2021.
“While the management team looks at adjusted EBITDA and cash flow
from operations as the primary indicators of whether our business
is growing in a sustainable way, achieving positive GAAP
profitability of well over $1 million this quarter is a great
milestone showing our progress,” remarked Bill Korn.
GAAP net loss was $0.15 per share, based on the
net loss attributable to common shareholders, which takes into
account the preferred stock dividends declared during the
quarter.
Non-GAAP adjusted net income for third quarter
2021 was $6.1 million, or $0.41 per share, and is calculated using
the end-of-period common shares outstanding. “Non-GAAP adjusted net
income exceeds the quarterly dividend paid to preferred
shareholders, which is a metric investors often pay attention to,”
Bill Korn noted. “Since non-GAAP adjusted net income excludes
non-cash expenses like depreciation and amortization, it is a good
indicator that our steady-state operating cash flow exceeds our
dividend.”
Adjusted EBITDA for third quarter 2021 was $6.7
million, or 17% of revenue, compared to $4.2 million in the same
period last year. CareCloud’s adjusted EBITDA increased by
approximately $2.5 million from Q3 2020, in large part due to the
cost savings resulting from integrating the businesses the Company
acquired during 2020. “Adjusted EBITDA set a new record, growing by
58% from third quarter last year, 18% from our last quarter and 17%
from our previous record,” stated Bill Korn.
Nine Month 2021
Financial Results
Revenue for the first nine months of 2021 was
$102.1 million, an increase of 40% compared to $73.1 million in the
first nine months of 2020. Revenue for nine months of 2021 was just
$3.0 million less than full-year revenue for all of 2020, and was
$37.7 million greater than full-year revenue for 2019.
Bill Korn remarked, “Approximately 82% of our
year-to-date revenue involved the use of our technology, including
clients using our core technology suite (approximately 50% of our
revenue), clients using one or more components of our technology
(approximately 22% of revenue), or clients where we are providing
IT services utilizing our technology processes and know-how
(approximately 10% of our revenue). Another 7% of revenue came from
clients where we are providing solely revenue cycle management
services, 9% of revenue is from clients where we are managing their
entire medical practice, and approximately 2% of revenue comes from
other services.”
For the first nine months of 2021, the Company’s
GAAP net loss was $686,000, compared to a GAAP net loss of $9.0
million in the first nine months of 2020. GAAP net loss per share
was $0.77, based on the net loss attributable to common
shareholders.
Non-GAAP adjusted net income for the first nine
months of 2021 was $13.5 million or $0.91 per share, an increase of
$10.0 million over adjusted net income of $3.5 million in the first
nine months of 2020.
During this period, our adjusted EBITDA was
$16.0 million, an increase of $10.8 million or 210% from $5.2
million in the same period last year. Adjusted EBITDA for nine
months for 2021 is $5.1 million greater than full-year 2020 and
$7.9 million greater than full year 2019, reflecting the cost
savings from previous acquisitions.
Cash Balances
and Capital
As of September 30, 2021, the Company had
approximately $9.3 million of cash, including restricted cash.
During the third quarter 2021, cash flow from operations was
approximately $5.1 million. Our net working capital on September
30, 2021 was approximately $9.9 million.
On September 30, 2021, the Company had
approximately 5,295,000 shares of non-convertible Series A
Preferred Stock outstanding. These shares pay monthly cash
dividends of approximately $0.23 per share, but they are fully
redeemable at any time the Company chooses. Bill Korn commented
“Our Preferred Stock has been a great way to finance our rapid
growth without restrictive covenants. Now that it is redeemable,
management is evaluating several options to start redeeming the
Preferred in ways that are accretive to common stockholders and
prepare us for the next stage of our growth.”
Conference Call Information
CareCloud management will host a conference call
today at 8:30 a.m. Eastern Time to discuss the third quarter 2021
results. The live webcast of the conference call and
related presentation slides can be accessed under Events
& Presentations at ir.carecloud.com/events/. An audio-only
option is available by dialing 786-204-3966 and referencing
“CareCloud Third Quarter 2021 Earnings Call.” Investors who opt for
audio only will need to download the related slides at
ir.carecloud.com/events/.
A replay of the conference call with slides will
be available approximately one hour after conclusion of the call at
the same link. An audio replay can also be accessed by dialing
412-317-6671 and providing access code 6554517.
About CareCloudCareCloud
(Nasdaq: MTBC) (Nasdaq: MTBCP) brings disciplined innovation to the
business of healthcare. Our suite of technology-enabled solutions
helps clients increase financial and operational performance,
streamline clinical workflows and improve the patient experience.
More than 40,000 providers count on CareCloud to help them improve
patient care while reducing administrative burdens and operating
costs. Learn more about our products and services including
practice management (PM), electronic health records (EHR), business
intelligence, telehealth, revenue cycle management (RCM), Medical
office practice management and patient experience management (PXM)
at www.carecloud.com.
Follow CareCloud on LinkedIn, Twitter and Facebook.
For additional information, please visit our
website at www.carecloud.com. To view CareCloud’s latest investor
presentations, read recent press releases, and listen to interviews
with management, please visit ir.carecloud.com.
Use of Non-GAAP Financial Measures
In our earnings releases, prepared remarks,
conference calls, slide presentations, and webcasts, we use and
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.carecloud.com.
Forward-Looking Statements
This press release contains various
forward-looking statements within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. 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, the impact of the Covid-19 pandemic on our financial
performance and business activities, and the expected results from
the integration of our acquisitions.
These forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they 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,
migrate newly acquired customers and retain new and existing
customers, maintain cost-effective global operations, increase
operational efficiency and reduce operating costs, predict and
properly adjust to changes in reimbursement and other industry
regulations and trends, retain the services of key personnel,
develop new technologies, upgrade and adapt legacy and acquired
technologies to work with evolving industry standards, compete with
other companies products and services competitive with ours, 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. In addition, there is
uncertainty about the spread of the Covid-19 virus and the impact
it may have on the Company’s operations, the demand for the
Company’s services, and economic activity in general.
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.
SOURCE CareCloud
Company Contact:Bill KornChief Financial
OfficerCareCloud, Inc. bkorn@carecloud.com
Investor Contact:Matt Kreps, Managing
DirectorDarrow Associates Investor Relationsmkreps@darrowir.com
(214) 597-8200
CARECLOUD, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS($ in thousands, except share
and per share amounts)
|
|
September 30, |
|
|
December 31, |
|
|
|
2021 |
|
|
2020 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash |
|
$ |
8,313 |
|
|
$ |
20,925 |
|
Restricted cash |
|
|
1,000 |
|
|
|
- |
|
Accounts receivable - net, of allowance for doubtful accounts of
$369 and $522 at September 30, 2021 and December 31, 2020,
respectively |
|
|
18,094 |
|
|
|
12,089 |
|
Contract asset |
|
|
4,661 |
|
|
|
4,105 |
|
Inventory |
|
|
500 |
|
|
|
399 |
|
Current assets - related party |
|
|
13 |
|
|
|
13 |
|
Prepaid expenses and other current assets |
|
|
3,817 |
|
|
|
7,288 |
|
Total current assets |
|
|
36,398 |
|
|
|
44,819 |
|
Property and equipment - net |
|
|
5,108 |
|
|
|
4,921 |
|
Operating lease right-of-use assets |
|
|
7,108 |
|
|
|
7,743 |
|
Intangible assets - net |
|
|
32,143 |
|
|
|
29,978 |
|
Goodwill |
|
|
60,661 |
|
|
|
49,291 |
|
Other assets |
|
|
1,091 |
|
|
|
1,247 |
|
TOTAL ASSETS |
|
$ |
142,509 |
|
|
$ |
137,999 |
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
5,803 |
|
|
$ |
6,461 |
|
Accrued compensation |
|
|
3,390 |
|
|
|
2,590 |
|
Accrued expenses |
|
|
5,894 |
|
|
|
8,501 |
|
Operating lease liability (current portion) |
|
|
3,929 |
|
|
|
4,729 |
|
Deferred revenue (current portion) |
|
|
1,089 |
|
|
|
1,173 |
|
Accrued liability to related party |
|
|
- |
|
|
|
1 |
|
Deferred payroll taxes |
|
|
927 |
|
|
|
927 |
|
Notes payable (current portion) |
|
|
590 |
|
|
|
401 |
|
Dividend payable |
|
|
3,843 |
|
|
|
4,241 |
|
Consideration payable |
|
|
1,000 |
|
|
|
- |
|
Total current liabilities |
|
|
26,465 |
|
|
|
29,024 |
|
Notes payable |
|
|
24 |
|
|
|
41 |
|
Contingent consideration |
|
|
6,500 |
|
|
|
- |
|
Borrowings under line of credit |
|
|
6,000 |
|
|
|
- |
|
Deferred payroll taxes |
|
|
927 |
|
|
|
927 |
|
Operating lease liability |
|
|
5,026 |
|
|
|
6,297 |
|
Deferred revenue |
|
|
216 |
|
|
|
305 |
|
Deferred tax liability |
|
|
300 |
|
|
|
160 |
|
Total liabilities |
|
|
45,458 |
|
|
|
36,754 |
|
COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par
value - authorized 7,000,000 shares at September 30, 2021 and
December 31, 2020; issued and outstanding 5,295,414 and 5,475,279
shares at September 30, 2021 and December 31, 2020,
respectively |
|
|
5 |
|
|
|
5 |
|
Common stock, $0.001 par value
- authorized 29,000,000 shares at September 30, 2021 and December
31, 2020; issued 15,614,210 and 14,121,044 shares at September 30,
2021 and December 31, 2020, respectively; 14,873,411 and 13,380,245
shares outstanding at September 30, 2021 and December 31, 2020,
respectively |
|
|
16 |
|
|
|
14 |
|
Additional paid-in
capital |
|
|
133,806 |
|
|
|
136,781 |
|
Accumulated deficit |
|
|
(34,575 |
) |
|
|
(33,889 |
) |
Accumulated other
comprehensive loss |
|
|
(1,539 |
) |
|
|
(1,004 |
) |
Less: 740,799 common shares
held in treasury, at cost at September 30, 2021 and December 31,
2020 |
|
|
(662 |
) |
|
|
(662 |
) |
Total shareholders’
equity |
|
|
97,051 |
|
|
|
101,245 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
142,509 |
|
|
$ |
137,999 |
|
CARECLOUD, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)($ in
thousands, except share and per share amounts)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
NET REVENUE |
|
$ |
38,304 |
|
|
$ |
31,639 |
|
|
$ |
102,137 |
|
|
$ |
73,085 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
|
24,124 |
|
|
|
19,718 |
|
|
|
62,719 |
|
|
|
45,842 |
|
Selling and marketing |
|
|
2,375 |
|
|
|
1,571 |
|
|
|
6,469 |
|
|
|
4,778 |
|
General and administrative |
|
|
5,921 |
|
|
|
6,191 |
|
|
|
17,814 |
|
|
|
17,176 |
|
Research and development |
|
|
488 |
|
|
|
2,367 |
|
|
|
4,328 |
|
|
|
6,846 |
|
Change in contingent consideration |
|
|
- |
|
|
|
(500 |
) |
|
|
- |
|
|
|
(500 |
) |
Depreciation and amortization |
|
|
3,547 |
|
|
|
3,206 |
|
|
|
9,505 |
|
|
|
6,944 |
|
Loss on lease termination, impairment and unoccupied lease
charges |
|
|
424 |
|
|
|
321 |
|
|
|
1,664 |
|
|
|
681 |
|
Total operating expenses |
|
|
36,879 |
|
|
|
32,874 |
|
|
|
102,499 |
|
|
|
81,767 |
|
OPERATING INCOME (LOSS) |
|
|
1,425 |
|
|
|
(1,235 |
) |
|
|
(362 |
) |
|
|
(8,682 |
) |
OTHER: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
4 |
|
|
|
2 |
|
|
|
10 |
|
|
|
44 |
|
Interest expense |
|
|
(91 |
) |
|
|
(132 |
) |
|
|
(274 |
) |
|
|
(396 |
) |
Other (expense) income -
net |
|
|
(65 |
) |
|
|
(246 |
) |
|
|
(80 |
) |
|
|
84 |
|
INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES |
|
|
1,273 |
|
|
|
(1,611 |
) |
|
|
(706 |
) |
|
|
(8,950 |
) |
Income tax (benefit)
provision |
|
|
(232 |
) |
|
|
62 |
|
|
|
(20 |
) |
|
|
18 |
|
NET INCOME (LOSS) |
|
$ |
1,505 |
|
|
$ |
(1,673 |
) |
|
$ |
(686 |
) |
|
$ |
(8,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock dividend |
|
|
3,642 |
|
|
|
4,230 |
|
|
|
10,408 |
|
|
|
10,150 |
|
NET LOSS ATTRIBUTABLE TO
COMMON SHAREHOLDERS |
|
$ |
(2,137 |
) |
|
$ |
(5,903 |
) |
|
$ |
(11,094 |
) |
|
$ |
(19,118 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per common share:
basic and diluted |
|
$ |
(0.15 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.77 |
) |
|
$ |
(1.53 |
) |
Weighted-average common shares used to compute basic and diluted
loss per share |
|
|
14,737,103 |
|
|
|
12,771,307 |
|
|
|
14,419,968 |
|
|
|
12,493,458 |
|
CARECLOUD, INC.CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)FOR THE NINE MONTHS ENDED SEPTEMBER 30,
2021 AND 2020($ in thousands)
|
|
2021 |
|
|
2020 |
|
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(686 |
) |
|
$ |
(8,968 |
) |
Adjustments to reconcile net
loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
9,853 |
|
|
|
6,816 |
|
Lease amortization |
|
|
2,191 |
|
|
|
2,134 |
|
Deferred revenue |
|
|
(193 |
) |
|
|
160 |
|
Provision for doubtful accounts |
|
|
465 |
|
|
|
296 |
|
Provision (benefit) for deferred income taxes |
|
|
140 |
|
|
|
(93 |
) |
Foreign exchange gain |
|
|
(87 |
) |
|
|
(63 |
) |
Interest accretion |
|
|
599 |
|
|
|
511 |
|
Gain on sale of assets |
|
|
- |
|
|
|
(2 |
) |
Stock-based compensation expense |
|
|
4,006 |
|
|
|
4,951 |
|
Change in contingent consideration |
|
|
- |
|
|
|
(500 |
) |
Adjustment of goodwill |
|
|
36 |
|
|
|
- |
|
Changes in operating assets and liabilities, net of businesses
acquired: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(1,363 |
) |
|
|
(1,209 |
) |
Contract asset |
|
|
(556 |
) |
|
|
(274 |
) |
Inventory |
|
|
(101 |
) |
|
|
186 |
|
Other assets |
|
|
(135 |
) |
|
|
106 |
|
Accounts payable and other liabilities |
|
|
(6,959 |
) |
|
|
(8,384 |
) |
Net cash provided by (used in) operating activities |
|
|
7,210 |
|
|
|
(4,333 |
) |
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of property and equipment |
|
|
(1,992 |
) |
|
|
(1,289 |
) |
Capitalized software |
|
|
(5,277 |
) |
|
|
(3,767 |
) |
Cash paid for acquisitions (net) |
|
|
(12,582 |
) |
|
|
(23,716 |
) |
Net cash used in investing activities |
|
|
(19,851 |
) |
|
|
(28,772 |
) |
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Preferred stock dividends paid |
|
|
(10,806 |
) |
|
|
(7,798 |
) |
Settlement of tax withholding obligations on stock issued to
employees |
|
|
(2,096 |
) |
|
|
(1,847 |
) |
Repayments of notes payable, net |
|
|
(745 |
) |
|
|
(430 |
) |
Proceeds from exercise of warrants |
|
|
6,391 |
|
|
|
2,995 |
|
Proceeds from issuance of common stock, net of expenses |
|
|
2,528 |
|
|
|
- |
|
Proceeds from line of credit |
|
|
11,000 |
|
|
|
19,500 |
|
Repayment from line of credit |
|
|
(5,000 |
) |
|
|
(19,500 |
) |
Settlement of contingent obligation |
|
|
- |
|
|
|
(1,325 |
) |
Net proceeds from issuance of preferred stock |
|
|
- |
|
|
|
44,544 |
|
Net cash provided by financing activities |
|
|
1,272 |
|
|
|
36,139 |
|
EFFECT OF EXCHANGE RATE
CHANGES ON CASH |
|
|
(243 |
) |
|
|
(188 |
) |
NET (DECREASE) INCREASE IN
CASH |
|
|
(11,612 |
) |
|
|
2,846 |
|
CASH - beginning of the
period |
|
|
20,925 |
|
|
|
19,994 |
|
CASH AND RESTRICTED CASH - end
of the period |
|
$ |
9,313 |
|
|
$ |
22,840 |
|
SUPPLEMENTAL NONCASH INVESTING
AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Preferred stock (cancelled) issued in connection with an
acquisition |
|
$ |
(4,000 |
) |
|
$ |
24,000 |
|
Contingent consideration |
|
$ |
6,500 |
|
|
$ |
- |
|
Vehicle financing obtained |
|
$ |
- |
|
|
$ |
28 |
|
Dividends declared, not paid |
|
$ |
3,843 |
|
|
$ |
4,097 |
|
Purchase of prepaid insurance with assumption of note |
|
$ |
967 |
|
|
$ |
668 |
|
Warrants issued |
|
$ |
- |
|
|
$ |
5,070 |
|
SUPPLEMENTAL INFORMATION -
Cash paid during the period for: |
|
|
|
|
|
|
|
|
Income taxes |
|
$ |
237 |
|
|
$ |
64 |
|
Interest |
|
$ |
55 |
|
|
$ |
150 |
|
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 to GAAP
Net Loss
Set forth below is a reconciliation of our
“adjusted EBITDA” to our GAAP net loss.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September
30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
($ in thousands) |
|
Net revenue |
|
$ |
38,304 |
|
|
$ |
31,639 |
|
|
$ |
102,137 |
|
|
$ |
73,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
|
1,505 |
|
|
|
(1,673 |
) |
|
|
(686 |
) |
|
|
(8,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Benefit) provision for income taxes |
|
|
(232 |
) |
|
|
62 |
|
|
|
(20 |
) |
|
|
18 |
|
Net interest expense |
|
|
87 |
|
|
|
130 |
|
|
|
264 |
|
|
|
352 |
|
Foreign exchange loss / other expense |
|
|
70 |
|
|
|
296 |
|
|
|
167 |
|
|
|
(17 |
) |
Stock-based compensation expense |
|
|
1,004 |
|
|
|
1,763 |
|
|
|
4,006 |
|
|
|
4,951 |
|
Depreciation and amortization |
|
|
3,547 |
|
|
|
3,206 |
|
|
|
9,505 |
|
|
|
6,944 |
|
Transaction and integration costs |
|
|
269 |
|
|
|
609 |
|
|
|
1,118 |
|
|
|
1,709 |
|
Loss on lease termination, impairment and unoccupied lease
charges |
|
|
424 |
|
|
|
321 |
|
|
|
1,664 |
|
|
|
681 |
|
Change in contingent consideration |
|
|
- |
|
|
|
(500 |
) |
|
|
- |
|
|
|
(500 |
) |
Adjusted EBITDA |
|
$ |
6,674 |
|
|
$ |
4,214 |
|
|
$ |
16,018 |
|
|
$ |
5,170 |
|
Non-GAAP Adjusted Operating
Income to GAAP Operating Loss
Set forth below is a reconciliation of our
non-GAAP “adjusted operating income” and non-GAAP “adjusted
operating margin” to our GAAP operating loss and GAAP operating
margin.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September
30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
($ in thousands) |
|
Net revenue |
|
$ |
38,304 |
|
|
$ |
31,639 |
|
|
$ |
102,137 |
|
|
$ |
73,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) |
|
|
1,505 |
|
|
|
(1,673 |
) |
|
|
(686 |
) |
|
|
(8,968 |
) |
(Benefit) provision for income taxes |
|
|
(232 |
) |
|
|
62 |
|
|
|
(20 |
) |
|
|
18 |
|
Net interest expense |
|
|
87 |
|
|
|
130 |
|
|
|
264 |
|
|
|
352 |
|
Other expense (income) - net |
|
|
65 |
|
|
|
246 |
|
|
|
80 |
|
|
|
(84 |
) |
GAAP operating income
(loss) |
|
|
1,425 |
|
|
|
(1,235 |
) |
|
|
(362 |
) |
|
|
(8,682 |
) |
GAAP operating margin |
|
|
3.7 |
% |
|
|
(3.9 |
)% |
|
|
(0.4 |
)% |
|
|
(11.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
1,004 |
|
|
|
1,763 |
|
|
|
4,006 |
|
|
|
4,951 |
|
Amortization of purchased intangible assets |
|
|
2,768 |
|
|
|
2,690 |
|
|
|
7,079 |
|
|
|
5,751 |
|
Transaction and integration costs |
|
|
269 |
|
|
|
609 |
|
|
|
1,118 |
|
|
|
1,709 |
|
Loss on lease termination, impairment and unoccupied lease
charges |
|
|
424 |
|
|
|
321 |
|
|
|
1,664 |
|
|
|
681 |
|
Change in contingent consideration |
|
|
- |
|
|
|
(500 |
) |
|
|
- |
|
|
|
(500 |
) |
Non-GAAP adjusted operating
income |
|
$ |
5,890 |
|
|
$ |
3,648 |
|
|
$ |
13,505 |
|
|
$ |
3,910 |
|
Non-GAAP adjusted operating margin |
|
|
15.4 |
% |
|
|
11.5 |
% |
|
|
13.2 |
% |
|
|
5.3 |
% |
Non-GAAP Adjusted Net Income
to GAAP Net Loss
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 September 30, |
|
|
Nine Months Ended September
30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
|
($ in thousands) |
|
GAAP net income (loss) |
|
$ |
1,505 |
|
|
$ |
(1,673 |
) |
|
$ |
(686 |
) |
|
$ |
(8,968 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss / other
expense |
|
|
70 |
|
|
|
296 |
|
|
|
167 |
|
|
|
(17 |
) |
Stock-based compensation
expense |
|
|
1,004 |
|
|
|
1,763 |
|
|
|
4,006 |
|
|
|
4,951 |
|
Amortization of purchased
intangible assets |
|
|
2,768 |
|
|
|
2,690 |
|
|
|
7,079 |
|
|
|
5,751 |
|
Transaction and integration
costs |
|
|
269 |
|
|
|
609 |
|
|
|
1,118 |
|
|
|
1,709 |
|
Loss on lease termination,
impairment and unoccupied lease charges |
|
|
424 |
|
|
|
321 |
|
|
|
1,664 |
|
|
|
681 |
|
Change in contingent
consideration |
|
|
- |
|
|
|
(500 |
) |
|
|
- |
|
|
|
(500 |
) |
Income tax expense (benefit)
related to goodwill |
|
|
13 |
|
|
|
7 |
|
|
|
140 |
|
|
|
(93 |
) |
Non-GAAP adjusted net
income |
|
$ |
6,053 |
|
|
$ |
3,513 |
|
|
$ |
13,488 |
|
|
$ |
3,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End-of-period shares |
|
|
14,873,411 |
|
|
|
13,136,088 |
|
|
|
14,873,411 |
|
|
|
13,136,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income
per share |
|
$ |
0.41 |
|
|
$ |
0.27 |
|
|
$ |
0.91 |
|
|
$ |
0.27 |
|
For purposes of determining non-GAAP adjusted
net income per share, we used the number of common shares
outstanding as of September 30, 2021 and 2020.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September
30, |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
GAAP net loss attributable to
common shareholders, per share |
|
$ |
(0.15 |
) |
|
$ |
(0.46 |
) |
|
$ |
(0.77 |
) |
|
$ |
(1.53 |
) |
Impact of preferred stock dividend |
|
|
0.25 |
|
|
|
0.33 |
|
|
|
0.72 |
|
|
|
0.85 |
|
Net income (loss) per
end-of-period share |
|
|
0.10 |
|
|
|
(0.13 |
) |
|
|
(0.05 |
) |
|
|
(0.68 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss / other expense |
|
|
0.00 |
|
|
|
0.02 |
|
|
|
0.01 |
|
|
|
0.00 |
|
Stock-based compensation expense |
|
|
0.07 |
|
|
|
0.14 |
|
|
|
0.27 |
|
|
|
0.38 |
|
Amortization of purchased intangible assets |
|
|
0.19 |
|
|
|
0.20 |
|
|
|
0.48 |
|
|
|
0.44 |
|
Transaction and integration costs |
|
|
0.02 |
|
|
|
0.06 |
|
|
|
0.08 |
|
|
|
0.13 |
|
Loss on lease termination, impairment and unoccupied lease
charges |
|
|
0.03 |
|
|
|
0.02 |
|
|
|
0.11 |
|
|
|
0.05 |
|
Change in contingent consideration |
|
|
0.00 |
|
|
|
(0.04 |
) |
|
|
0.00 |
|
|
|
(0.04 |
) |
Income tax expense (benefit) related to goodwill |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.01 |
|
|
|
(0.01 |
) |
Non-GAAP adjusted earnings per
share |
|
$ |
0.41 |
|
|
$ |
0.27 |
|
|
$ |
0.91 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End-of-period common
shares |
|
|
14,873,411 |
|
|
|
13,136,088 |
|
|
|
14,873,411 |
|
|
|
13,136,088 |
|
In-the-money warrants and
outstanding unvested RSUs |
|
|
2,432,636 |
|
|
|
4,910,423 |
|
|
|
2,432,636 |
|
|
|
4,910,423 |
|
Total fully diluted
shares |
|
|
17,306,047 |
|
|
|
18,046,511 |
|
|
|
17,306,047 |
|
|
|
18,046,511 |
|
Non-GAAP adjusted diluted
earnings per share |
|
$ |
0.35 |
|
|
$ |
0.19 |
|
|
$ |
0.78 |
|
|
$ |
0.19 |
|
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 CareCloud 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, adjusted
operating income, adjusted operating margin, 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, integration costs, transaction
costs, impairment charges and changes in contingent
consideration.
Management defines “non-GAAP adjusted operating
income” as the sum of GAAP operating income (loss) before
stock-based compensation expense, amortization of purchased
intangible assets, integration costs, transaction costs, impairment
charges and changes in contingent consideration, and “non-GAAP
adjusted operating margin” as non-GAAP adjusted operating income
divided by net revenue.
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, integration costs, transaction costs,
impairment charges 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:
Foreign exchange / other expense. Other expense
is excluded because foreign currency gains and losses and other
non-operating expenses are 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 recorded.
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
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
recorded.
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. 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.
Loss on lease termination, impairment and
unoccupied lease charges. Loss on lease termination represents the
write-off of leasehold improvements as a result of an early lease
termination. Impairment charges primarily represent remaining lease
and termination fees associated with discontinued facilities and a
non-cancellable vendor contract where the services are no longer
being used. Unoccupied lease charges represent the portion of lease
and related costs for vacant space not being utilized by the
Company. 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.
Income tax expense (benefit) related to
goodwill. Income tax expense (benefit) resulting from the
amortization of goodwill related to our acquisitions represents a
charge (benefit) to record the tax effect 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.
CareCloud (NASDAQ:MTBCP)
Historical Stock Chart
From Sep 2024 to Oct 2024
CareCloud (NASDAQ:MTBCP)
Historical Stock Chart
From Oct 2023 to Oct 2024