- Revenue increased 23% year-over-year to
$38.6 million with both telehealth and WorkSimpli achieving record revenues. - Adjusted EPS of
$0.08 per share compared with a loss of$0.03 in the year-ago period. - Consolidated adjusted EBITDA increased to
$2.8 million compared with a loss of$0.8 million in the year-ago period, and a 60% improvement versus the second quarter of 2023. - Weight Management revenue more than quadrupled versus the second quarter of 2023.
- Telehealth subscribers grew 22% year-over-year to a record 207,000 patients.
Conference call begins at
Management Commentary
“During the third quarter of 2023
“We finished the third quarter with outstanding top- and bottom-line financial results, with revenue increasing 23% and adjusted EBITDA increasing to a record
Third Quarter Financial Highlights
- Revenue increased 23% year-over-year to
$38.6 million . - Telehealth revenue increased 14% versus the year-ago period and 9% sequentially. WorkSimpli revenue increased 42% versus the year-ago period.
- Telehealth active subscribers increased 22% over the year-ago period to approximately 207,000.
- Weight Management revenue more than quadrupled sequentially.
- WorkSimpli active subscribers increased 14% over the year-ago period to approximately 170,000.
LifeMD branded Virtual Primary Care products and services subscribers finished the third quarter at over 26,000 with over 10,000 active patients on our GLP-1 Weight Management platform.- Gross margin expanded to a record 88%, up from 85% in the year-ago period.
- GAAP net loss was
$6.9 million or$0.20 per share, compared with GAAP net loss of$8.1 million or$0.26 per share in the year-ago period. - Adjusted EBITDA increased to
$2.8 million compared with a loss of$0.8 million in the year-ago period (see definition below of this non-GAAP financial measure and reconciliation to GAAP). - Adjusted diluted EPS was
$0.08 compared with a loss of$0.03 in the year-ago period (see definition below of this non-GAAP financial measure and reconciliation to GAAP). - Second consecutive quarter of positive cash flow from operations and exited the quarter with
$15.3 million of cash.
Third Quarter Key Performance Metrics
($ in 000s) | Three Months Ended | Y-o-Y | ||||||||
Key Performance Metrics | 2023 | 2022 | % Growth | |||||||
Revenue | ||||||||||
Telehealth | $ | 24,343 | $ | 21,365 | 14 | % | ||||
WorkSimpli | $ | 14,271 | $ | 10,047 | 42 | % | ||||
Total Revenue | $ | 38,614 | $ | 31,412 | 23 | % | ||||
Subscription Revenue as % of Total | 96 | % | 95 | % | 1 | % | ||||
Active Subscribers | ||||||||||
Telehealth Active Subscribers | 206,536 | 169,916 | 22 | % | ||||||
WorkSimpli Active Subscribers | 170,388 | 149,095 | 14 | % | ||||||
Total Active Subscribers | 376,924 | 319,011 | 18 | % | ||||||
Financial Guidance
For the fourth quarter of 2023, the Company expects:
- Revenue to be between
$40 million and$41 million . - Adjusted EBITDA to be between
$3 million and$4 million .
For the full year 2023, the Company expects:
- Revenue to be between
$148 million and$149 million . - Adjusted EBITDA to be between
$10 and$11 million .
Guidance for 2023 includes a
Conference Call
LifeMD’s management will host a conference call today at
Toll-free dial-in number: | 877-704-4453 | |
International dial-in number: | 201-389-0920 | |
Conference ID: | 13741419 | |
A replay of the webcast will be available in the Investors section of the Company’s website at ir.lifemd.com.
About
Cautionary Note Regarding Forward Looking Statements
This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the safe harbor provision of the
Forward-looking statements are not historical facts and are not assurances of future performance. Rather, these statements are based on our current expectations, beliefs, and assumptions regarding future plans and strategies, projections, anticipated and unanticipated events and trends, the economy, and other future conditions, including the impact of any of the aforementioned on our future business. As forward-looking statements relate to the future, they are subject to inherent risk, uncertainties, and changes in circumstances and assumptions that are difficult to predict, including some of which are out of our control. Consequently, our actual results, performance, and financial condition may differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to, “Risk Factors” identified in our filings with the
Any forward-looking statement made in the news release is based on information currently available to us as of the date on which this release is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required under applicable law or regulation.
Investor Contact
Marc Benathen, CFO
marc@lifemd.com
Media Contact
press@lifemd.com
Tables to Follow
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash | $ | 15,288,330 | $ | 3,958,957 | |||
Accounts receivable, net | 4,418,582 | 2,834,750 | |||||
Product deposit | 84,768 | 127,265 | |||||
Inventory, net | 3,790,646 | 3,703,363 | |||||
Other current assets | 1,303,960 | 687,022 | |||||
Total Current Assets | 24,886,286 | 11,311,357 | |||||
Non-current Assets | |||||||
Equipment, net | 424,637 | 476,441 | |||||
Right of use asset | 799,104 | 1,206,009 | |||||
Capitalized software, net | 11,325,766 | 8,840,187 | |||||
Intangible assets, net | 3,255,231 | 3,831,859 | |||||
Total Non-current Assets | 15,804,738 | 14,354,496 | |||||
Total Assets | $ | 40,691,024 | $ | 25,665,853 | |||
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 9,637,390 | $ | 10,106,793 | |||
Accrued expenses | 15,493,128 | 12,166,509 | |||||
Notes payable, net | 426,223 | 2,797,250 | |||||
Current operating lease liabilities | 725,832 | 756,093 | |||||
Deferred revenue | 6,239,354 | 5,547,506 | |||||
Total Current Liabilities | 32,521,927 | 31,374,151 | |||||
Long-term Liabilities | |||||||
Long-term debt, net | 18,827,283 | - | |||||
Noncurrent operating lease liabilities | 169,821 | 574,136 | |||||
Contingent consideration | 256,250 | 443,750 | |||||
Purchase price payable | - | 579,319 | |||||
Total Liabilities | 51,775,281 | 32,971,356 | |||||
Commitments and Contingencies | |||||||
Mezzanine Equity | |||||||
Preferred Stock, | |||||||
Series B Preferred Stock, | - | 4,565,822 | |||||
Stockholders’ Deficit | |||||||
Series A Preferred Stock, | 140 | 140 | |||||
Common Stock, | 347,593 | 315,528 | |||||
Additional paid-in capital | 196,901,377 | 179,015,250 | |||||
Accumulated deficit | (209,756,573 | ) | (190,562,994 | ) | |||
(163,701 | ) | (163,701 | ) | ||||
(12,671,164 | ) | (11,395,777 | ) | ||||
Non-controlling interest | 1,586,907 | (475,548 | ) | ||||
Total Stockholders’ Deficit | (11,084,257 | ) | (11,871,325 | ) | |||
Total Liabilities, Mezzanine Equity and Stockholders’ Deficit | $ | 40,691,024 | $ | 25,665,853 | |||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenues | ||||||||||||||||
Telehealth revenue, net | $ | 24,342,789 | $ | 21,365,178 | $ | 66,896,719 | $ | 66,231,202 | ||||||||
WorkSimpli revenue, net | 14,271,122 | 10,047,291 | 40,790,439 | 24,682,602 | ||||||||||||
Total revenues, net | 38,613,911 | 31,412,469 | 107,687,158 | 90,913,804 | ||||||||||||
Cost of revenues | ||||||||||||||||
Cost of telehealth revenue | 4,479,760 | 4,502,919 | 12,525,887 | 14,042,112 | ||||||||||||
Cost of WorkSimpli revenue | 301,746 | 213,923 | 1,019,018 | 558,216 | ||||||||||||
Total cost of revenues | 4,781,506 | 4,716,842 | 13,544,905 | 14,600,328 | ||||||||||||
Gross profit | 33,832,405 | 26,695,627 | 94,142,253 | 76,313,476 | ||||||||||||
Expenses | ||||||||||||||||
Selling and marketing expenses | 19,776,797 | 17,200,859 | 56,062,345 | 60,928,649 | ||||||||||||
General and administrative expenses | 13,398,387 | 12,385,030 | 36,120,723 | 37,757,710 | ||||||||||||
Other operating expenses | 1,622,137 | 1,617,375 | 4,640,690 | 5,076,820 | ||||||||||||
Customer service expenses | 2,106,252 | 1,488,428 | 5,573,734 | 3,428,098 | ||||||||||||
Development costs | 1,498,213 | 821,636 | 4,062,498 | 1,951,039 | ||||||||||||
- | - | - | 2,735,000 | |||||||||||||
Change in fair value of contingent consideration | - | 248,000 | - | (2,487,000 | ) | |||||||||||
Total expenses | 38,401,786 | 33,761,328 | 106,459,990 | 109,390,316 | ||||||||||||
Operating loss | (4,569,381 | ) | (7,065,701 | ) | (12,317,737 | ) | (33,076,840 | ) | ||||||||
Other expenses | ||||||||||||||||
Interest expense, net | (713,766 | ) | (132,235 | ) | (1,973,901 | ) | (432,405 | ) | ||||||||
(Loss) gain on debt extinguishment | - | - | (325,198 | ) | 63,400 | |||||||||||
Net loss | (5,283,147 | ) | (7,197,936 | ) | (14,616,836 | ) | (33,445,845 | ) | ||||||||
Net income attributable to noncontrolling interests | 839,288 | 83,737 | 2,247,055 | 154,464 | ||||||||||||
Net loss attributable to | (6,122,435 | ) | (7,281,673 | ) | (16,863,891 | ) | (33,600,309 | ) | ||||||||
Preferred stock dividends | (776,563 | ) | (776,563 | ) | (2,329,688 | ) | (2,329,688 | ) | ||||||||
Net loss attributable to | $ | (6,898,998 | ) | $ | (8,058,236 | ) | $ | (19,193,579 | ) | $ | (35,929,997 | ) | ||||
Basic loss per share attributable to | $ | (0.20 | ) | $ | (0.26 | ) | $ | (0.58 | ) | $ | (1.17 | ) | ||||
Diluted loss per share attributable to | $ | (0.20 | ) | $ | (0.26 | ) | $ | (0.58 | ) | $ | (1.17 | ) | ||||
Weighted average number of common shares outstanding: | ||||||||||||||||
Basic | 34,472,904 | 30,935,643 | 32,959,665 | 30,830,533 | ||||||||||||
Diluted | 34,472,904 | 30,935,643 | 32,959,665 | 30,830,533 | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||
Net loss | $ | (5,283,147 | ) | $ | (7,197,936 | ) | $ | (14,616,836 | ) | $ | (33,445,845 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Amortization of debt discount | 79,653 | - | 233,495 | - | ||||||||||||
Amortization of capitalized software | 1,439,049 | 770,873 | 3,787,716 | 1,746,899 | ||||||||||||
Amortization of intangibles | 245,968 | 325,495 | 725,496 | 666,782 | ||||||||||||
Accretion of consideration payable | 34,265 | 37,373 | 148,481 | 172,741 | ||||||||||||
Depreciation of fixed assets | 49,852 | 43,761 | 146,286 | 117,008 | ||||||||||||
Loss (gain) on debt extinguishment | - | - | 325,198 | (63,400 | ) | |||||||||||
Change in fair value of contingent consideration | - | 248,000 | - | (2,487,000 | ) | |||||||||||
- | - | - | 2,735,000 | |||||||||||||
Operating lease payments | 191,645 | 172,836 | 562,073 | 463,198 | ||||||||||||
Stock issued for legal settlement | 532,000 | 816,000 | 532,000 | 816,000 | ||||||||||||
Stock compensation expense | 3,318,253 | 3,336,213 | 8,843,736 | 11,850,000 | ||||||||||||
Changes in Assets and Liabilities | ||||||||||||||||
Accounts receivable | (750,039 | ) | (24,491 | ) | (1,583,832 | ) | (1,558,063 | ) | ||||||||
Product deposit | 150,347 | 332,790 | 42,497 | 95,505 | ||||||||||||
Inventory | (92,344 | ) | (710,889 | ) | (87,283 | ) | (2,052,363 | ) | ||||||||
Other current assets | (631,765 | ) | 58,629 | (616,938 | ) | (21,386 | ) | |||||||||
Change in operating lease liability | (201,667 | ) | (167,644 | ) | (589,744 | ) | (378,095 | ) | ||||||||
Deferred revenue | 571,144 | 360,650 | 691,848 | 853,272 | ||||||||||||
Accounts payable | 44,011 | (1,026,708 | ) | (469,403 | ) | 1,827,103 | ||||||||||
Accrued expenses | 1,378,992 | (150,954 | ) | 5,611,131 | (2,303,466 | ) | ||||||||||
Other operating activity | - | - | (579,319 | ) | - | |||||||||||
Net cash provided by (used in) operating activities | 1,076,217 | (2,776,002 | ) | 3,106,602 | (20,966,110 | ) | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||
Cash paid for capitalized software costs | (2,373,443 | ) | (2,220,018 | ) | (6,273,295 | ) | (6,742,946 | ) | ||||||||
Purchase of equipment | (30,263 | ) | (21,546 | ) | (94,482 | ) | (378,877 | ) | ||||||||
Purchase of intangible assets | - | - | (148,868 | ) | (4,000,500 | ) | ||||||||||
Acquisition of business, net of cash acquired | - | - | - | (1,012,395 | ) | |||||||||||
Net cash used in investing activities | (2,403,706 | ) | (2,241,564 | ) | (6,516,645 | ) | (12,134,718 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||
Proceeds from long-term debt, net | 4,993,885 | - | 19,466,887 | - | ||||||||||||
Proceeds from notes payable | 347,691 | - | 2,347,691 | - | ||||||||||||
Sale of common stock under ATM, net | 899,567 | - | 899,567 | - | ||||||||||||
Repayment of notes payable, net of prepayment penalty | (657,002 | ) | - | (5,043,916 | ) | - | ||||||||||
Cash proceeds from exercise of options | - | - | - | 90,400 | ||||||||||||
Cash proceeds from exercise of warrants | - | - | - | 38,500 | ||||||||||||
Preferred stock dividends | (776,563 | ) | (776,563 | ) | (2,329,688 | ) | (2,329,688 | ) | ||||||||
Contingent consideration payment for ResumeBuild | (62,500 | ) | (62,500 | ) | (187,500 | ) | (93,750 | ) | ||||||||
Net payments for membership interest of WorkSimpli | - | 12,150 | (305,625 | ) | 12,150 | |||||||||||
Distributions to non-controlling interest | (36,000 | ) | (36,000 | ) | (108,000 | ) | (108,000 | ) | ||||||||
Net cash provided by (used in) financing activities | 4,709,078 | (862,913 | ) | 14,739,416 | (2,390,388 | ) | ||||||||||
Net increase (decrease) in cash | 3,381,589 | (5,880,479 | ) | 11,329,373 | (35,491,216 | ) | ||||||||||
Cash at beginning of period | 11,906,741 | 11,717,302 | 3,958,957 | 41,328,039 | ||||||||||||
Cash at end of period | $ | 15,288,330 | $ | 5,836,823 | $ | 15,288,330 | $ | 5,836,823 | ||||||||
Cash paid for interest | ||||||||||||||||
Cash paid during the period for interest | $ | 717,054 | $ | - | $ | 1,485,242 | $ | - | ||||||||
Non-cash investing and financing activities: | ||||||||||||||||
Warrants issued for debt instruments | $ | (215,243 | ) | $ | - | $ | 873,100 | $ | - | |||||||
Cashless exercise of options | $ | 579 | $ | 42 | $ | 744 | $ | 297 | ||||||||
Consideration payable for Cleared acquisition | $ | - | $ | - | $ | - | $ | 8,079,367 | ||||||||
Consideration payable for ResumeBuild acquisition | $ | - | $ | - | $ | - | $ | 500,000 | ||||||||
Stock issued for noncontingent consideration payment | $ | 642,000 | $ | - | $ | 1,926,000 | $ | - | ||||||||
Series B Preferred Stock conversion | $ | 5,072,814 | $ | - | $ | 5,072,814 | $ | - | ||||||||
Principal of Paycheck Protection Program loans forgiven | $ | - | $ | - | $ | - | $ | 63,400 | ||||||||
Right of use asset | $ | 62,053 | $ | - | $ | 155,168 | $ | - | ||||||||
Right of use lease liability | $ | 62,053 | $ | - | $ | 155,168 | $ | - | ||||||||
About the Use of Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use adjusted EBITDA and adjusted EPS as non-GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors.
Adjusted EBITDA is defined as income (loss) attributable to common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory valuation, sales return reserves, litigation costs, loss on debt extinguishment, dividends, insurance acceptance and Sarbanes-Oxley readiness, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of adjusted EBITDA to net loss attributable to common shareholders, its most directly comparable GAAP financial measure.
Adjusted EPS is defined as the diluted net loss attributable to
We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms adjusted EBITDA and adjusted EPS may vary from that of others in our industry. Adjusted EBITDA and adjusted EPS should not be considered as an alternative to net loss before taxes, net loss per share, operating loss or any other performance measures derived in accordance with GAAP as measures of performance.
Reconciliation of GAAP Net Loss to Adjusted EBITDA | ||||||||||||||||
(in whole numbers, unaudited) | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net loss attributable to common shareholders | $ | (6,898,998 | ) | $ | (8,058,236 | ) | $ | (19,193,579 | ) | $ | (35,929,997 | ) | ||||
Interest expense (excluding amortization of debt discount) | 594,229 | 17,550 | 1,233,415 | 92,090 | ||||||||||||
Depreciation, amortization and accretion expense | 1,769,134 | 1,177,502 | 4,807,979 | 2,703,430 | ||||||||||||
Amortization of debt discount | 79,653 | - | 233,495 | - | ||||||||||||
(Gain) loss on debt extinguishment | - | - | 325,198 | (63,400 | ) | |||||||||||
Financing transactions expense | 305,424 | - | 735,501 | 152,015 | ||||||||||||
Litigation costs | 420,404 | 813,000 | 1,426,330 | 1,517,359 | ||||||||||||
Inventory and reserve adjustment | - | - | 232,630 | 230,661 | ||||||||||||
Severance costs | 7,692 | - | 7,692 | 179,090 | ||||||||||||
Acquisitions expenses | 86,942 | - | 127,138 | 265,153 | ||||||||||||
Change in fair value of contingent consideration | - | 248,000 | - | (2,487,000 | ) | |||||||||||
- | - | - | 2,735,000 | |||||||||||||
Insurance acceptance readiness | 8,094 | - | 66,634 | - | ||||||||||||
Sarbanes Oxley readiness | 48,576 | - | 48,576 | - | ||||||||||||
Accrued interest on Series B Convertible Preferred Stock | 39,884 | 114,685 | 506,991 | 340,315 | ||||||||||||
Foreign exchange (gain) loss | 272,899 | 685,242 | 796,619 | 685,242 | ||||||||||||
Taxes | 70,378 | - | 70,378 | - | ||||||||||||
Dividends | 1,813,130 | 776,563 | 3,971,890 | 2,329,688 | ||||||||||||
Stock-based compensation expense | 3,318,253 | 3,336,213 | 8,843,736 | 11,850,000 | ||||||||||||
Net income attributable to noncontrolling interests | 839,288 | 83,737 | 2,247,055 | 154,464 | ||||||||||||
Adjusted EBITDA | $ | 2,774,982 | $ | (805,744 | ) | $ | 6,487,678 | $ | (15,245,890 | ) |
Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS | |||||||||||||||
(unaudited) | Three Months Ended | Nine Months Ended | |||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Diluted loss per share attributable to | $ | (0.20 | ) | $ | (0.26 | ) | $ | (0.58 | ) | $ | (1.17 | ) | |||
Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS | |||||||||||||||
Interest expense (excluding amortization of debt discount) | 0.02 | - | 0.04 | - | |||||||||||
Depreciation, amortization and accretion expense | 0.05 | 0.04 | 0.15 | 0.09 | |||||||||||
Amortization of debt discount | - | - | 0.01 | - | |||||||||||
Loss on debt extinguishment | - | - | 0.01 | - | |||||||||||
Financing transactions expense | 0.01 | - | 0.02 | - | |||||||||||
Litigation costs | 0.01 | 0.03 | 0.04 | 0.05 | |||||||||||
Inventory and reserve adjustment | - | - | 0.01 | 0.01 | |||||||||||
Severance costs | - | - | - | 0.01 | |||||||||||
Acquisitions expenses | - | - | - | 0.01 | |||||||||||
Change in fair value of contingent consideration | - | 0.01 | - | (0.08 | ) | ||||||||||
- | - | - | 0.09 | ||||||||||||
Insurance acceptance readiness | - | - | - | - | |||||||||||
Sarbanes Oxley readiness | - | - | - | - | |||||||||||
Accrued interest on Series B Convertible Preferred Stock | - | - | 0.02 | 0.01 | |||||||||||
Foreign exchange (gain) loss | 0.01 | 0.02 | 0.02 | 0.02 | |||||||||||
Taxes | - | - | - | - | |||||||||||
Dividends | 0.05 | 0.02 | 0.12 | 0.08 | |||||||||||
Stock-based compensation expense | 0.10 | 0.11 | 0.27 | 0.38 | |||||||||||
Net income attributable to noncontrolling interests | 0.03 | - | 0.07 | 0.01 | |||||||||||
Adjusted EPS | $ | 0.08 | $ | (0.03 | ) | $ | 0.20 | $ | (0.49 | ) |
Source:
2023 GlobeNewswire, Inc., source