- First quarter 2022 consolidated revenue of $29.0 million up 60% from the same year ago period.
- Adjusted EPS of $(0.25), 14% sequential improvement versus the prior quarter.
- Re-affirm Full Year Adjusted EBITDA guidance and remain on track to reach Consolidated Adjusted EBITDA profitability by fourth quarter 2022.
- Cash balance of $25.1 million as of March 31, 2022 with no debt. Cash Flow during the quarter included $7 million of one-time cash outflows related to two acquisitions and related working capital investments.
NEW YORK, May 13, 2022 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the first quarter ended March 31, 2022. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today, May 13, 2022, at 8:00 a.m. Eastern time to discuss the results.
Q1 2022 Financial Highlights
- Record first quarter revenue of $29.0 million, up 60%
- Gross profit totaled $23.8 million, up 59% with gross margins of 82%, flat to the same year-ago period
- 91% of revenue generated by subscriptions, up from 88%
- $25.1 million of cash as of March 31, 2022 and no debt
- Adjusted EPS $(0.25) for the first quarter, a 14% sequential improvement versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below)
Q1 and Recent Operational Highlights
- Continued leverage of Selling and Marketing expenses despite market headwinds, with first quarter expenses as a percentage of revenue reducing to 75%, a 200-basis point improvement versus the prior quarter and a 2,700-basis point improvement versus the same year-ago period.
- Telehealth orders increased 59% to approximately 257,000.
- Closed the acquisition of Cleared Technologies, a leading allergy, asthma and immunology telehealth platform. The Cleared platform offerings include prescription drug, FDA approved over-the-counter (OTC) treatments, diagnostics and a growing pipeline of pharmaceutical and biotech customer partners.
- Announced full-scale national launch of the Company’s virtual primary care platform following a successful beta launch last November. The Company expects to launch cross-sale functionality with its indication-specific offerings in the second quarter.
Key Performance Metrics
| ($ in 000s) | Three Months Ended March 31 | Y-o-Y | ||||||||
| Key Performance Metrics | 2022 | 2021 | % Growth | |||||||
| Revenue | ||||||||||
| Telehealth | $ | 22,598 | $ | 13,283 | 70 | % | ||||
| WorkSimpli | $ | 6,445 | $ | 4,915 | 31 | % | ||||
| Total Revenue | $ | 29,043 | $ | 18,198 | 60 | % | ||||
| Subscription Revenue as % of Total | 91 | % | 88 | % | 3 | % | ||||
| Telehealth Volume | ||||||||||
| Total Telehealth Orders | 256,651 | 161,109 | 59 | % | ||||||
| Total Active Subscribers | 164,605 | 91,685 | 80 | % | ||||||
| WorkSimpli | ||||||||||
| Active Subscribers | 105,050 | 81,387 | 29 | % | ||||||
Management Commentary
“In the first quarter 2022, LifeMD recorded its 13th consecutive quarter of sequential revenue growth and a 14% sequential improvement in Adjusted EPS despite challenging macro conditions including significant advertising market headwinds. We successfully completed two acquisitions, including Cleared Technologies for our core telehealth business and ResumeBuild for our non-core subsidiary, WorkSimpli, as well as executed the national launch of our Virtual Primary Care platform,” said Justin Schreiber, CEO of LifeMD. “Despite these achievements, the first quarter of 2022 was very much a transitional quarter for the company in which we made important capital investments to scale our pharmacy infrastructure and related technology to proactively position us for expected rapid growth in the coming quarters and years. Looking ahead we remain focused on continuing to scale our existing telehealth offerings, integrating and scaling our new telehealth businesses and delivering upon our commitment to reach Adjusted EBITDA profitability by the fourth quarter of 2022.”
LifeMD CFO Marc Benathen commented: “During the first quarter, we continued to demonstrate our ability to consistently grow our top-line, while also achieving operating leverage to drive further improvements in sequential profitability. Our results had short-term impacts related to market headwinds in the advertising industry which we’ve since adapted to and the one-time deferral of approximately $1 million in re-billing revenue from the first to second quarter following a system upgrade. LifeMD remains on track to deliver our previously released Full Year Adjusted EBITDA guidance range and Adjusted EBITDA profitability by the fourth quarter of 2022. Additionally, we have hired a highly experienced M&A advisor to help us lead the WorkSimpli sale process which we believe to be a meaningful step forward in this process.”
Q1 2022 Financial Summary
- Revenue for the quarter ended March 31, 2022 increased 60% to $29.0 million from $18.2 million in 2021. The increase in revenues was attributable to a 70% increase in telehealth revenue and a 31% increase in WorkSimpli revenue versus the year-ago period. While our non-core subsidiary, WorkSimpli, revenues did decline sequentially following the integration of a new acquisition, the business achieved its strongest performance month ever in March 2022 recording over 13,000 net new subscribers in the month of March alone. WorkSimpli GAAP results were also impacted by $1.4 million of March 2022 deferred revenue related to new sign-ups and an increase in annual sign-ups.
- Gross profit increased by 59% to $23.8 million, compared to $15.0 million in the prior year. Gross margin was 82% for both the quarter ended March 31, 2022 and 2021.
- Operating expenses in 2022 were $36.9 million, up from $26.9 million in the prior year. The increase was primarily due to increases in selling and marketing expenses of $3.3 million, general and administrative expenses of $5.3 million, other operating expenses of $691,000, customer service expenses of $638,000 and development costs of $117,000. General and administrative expenses included $4.5 million of non-cash stock-based compensation expense.
- Net loss attributable to common stockholders for 2022 was $14.1 million or $(0.46) per share, as compared to a net loss attributable to common stockholders of $11.6 million or $(0.47) per share in the prior year.
- Excluding $4.5 million related to stock-based compensation expense, $531,000 of depreciation and amortization expense, $168,000 of interest expense, $776,000 of preferred stock dividends and $545,000 of non-recurring expenses, adjusted EPS, a non-GAAP measure, totaled a loss of $(0.25) per share as compared to a loss of $(0.37) per share in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Adjusted EBITDA, a non-GAAP financial measure, totaled a loss of $7.6 million, compared to an adjusted EBITDA loss of $9.0 million in the same year-ago period (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
- Cash totaled $25.1 million as of March 31, 2022.
Financial Guidance
For the Second Quarter 2022, the Company expects:
- Revenue to total between $31 million and $33 million
- Adjusted EBITDA between $(5.5) million and $(6.5) million
For the Full Year 2022, the Company expects:
- Revenue to total between $132 million and $138 million
- Adjusted EBITDA between $(14) million and $(20) million
The Company remains on track to achieve Adjusted EBITDA profitability by the fourth quarter of 2022.
Conference Call
LifeMD’s management will host a conference call today, May 13, 2022 at 8:00 am Eastern Time to discuss the company’s financial results and outlook, followed by a question-and-answer period. Details for the call are as follows:
| Toll-free dial-in number: | 1-877-704-4453 | |
| International dial-in number: | 1-201-389-0920 | |
| Conference ID: | 13729668 | |
| Webcast: | Click here |
The conference call will be webcast live and available for replay via a link provided in the Investors section of the company’s website at lifemd.com. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.
Listeners are encouraged to review the company's periodic reports filed with the U.S. Securities and Exchange Commission, including the discussion of risk factors, historical results of operations and financial condition as provided in these reports.
About LifeMD
LifeMD is a 50-state direct-to-patient telehealth company with a portfolio of brands that offer virtual primary care, diagnostics, and specialized treatment for men’s and women’s health, allergy & asthma, and dermatological conditions. By leveraging its proprietary technology platform, 50-state affiliated medical group, and nationwide mail-order pharmacy network, LifeMD is increasing access to top-notch healthcare that is affordable to anyone. To learn more, go to LifeMD.com.
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 U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release may be identified by the use of words such as: “believe,” “expect,” “anticipate,” “project,” “should,” “plan,” “will,” “may,” “intend,” “estimate,” predict,” “continue,” and “potential,” or, in each case, their negative or other variations or comparable terminology referencing future periods. Examples of forward-looking statements include, but are not limited to, statements regarding our financial outlook and guidance, short and long-term business performance and operations, future revenues and earnings, regulatory developments, legal events or outcomes, ability to comply with complex and evolving regulations, market conditions and trends, new or expanded products and offerings, growth strategies, underlying assumptions, and the effects of any of the foregoing on our future results of operations or financial condition.
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 Securities and Exchange Commission, including, but not limited to, our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and any amendments thereto. Even if our actual results, performance, or financial condition are consistent with forward-looking statements contained in such filings, they may not be indicative of our actual results, performance, or financial condition in subsequent periods.
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.
Company Contact
LifeMD, Inc.
Marc Benathen, CFO
marc@lifemd.com
Investor Relations Contact
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com
Tables to Follow
| LIFEMD, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| (Unaudited) | |||||||
| March 31, 2022 | December 31, 2021 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash | $ | 25,084,644 | $ | 41,328,039 | |||
| Accounts receivable, net | 1,796,502 | 980,055 | |||||
| Product deposit | 615,293 | 203,556 | |||||
| Inventory, net | 1,240,034 | 1,616,600 | |||||
| Other current assets | 842,989 | 793,190 | |||||
| Total Current Assets | 29,579,462 | 44,921,440 | |||||
| Non-current Assets | |||||||
| Equipment, net | 506,367 | 233,805 | |||||
| Right of use asset, net | 1,633,924 | 1,752,448 | |||||
| Capitalized software, net | 4,710,120 | 2,995,789 | |||||
| Goodwill and intangible assets, net | 13,860,603 | 19,761 | |||||
| Total Non-current Assets | 20,711,014 | 5,001,803 | |||||
| Total Assets | $ | 50,290,476 | $ | 49,923,243 | |||
| LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY | |||||||
| Current Liabilities | |||||||
| Accounts payable | $ | 11,676,030 | $ | 9,059,214 | |||
| Accrued expenses | 11,550,232 | 11,595,605 | |||||
| Notes payable, net | 63,400 | 63,400 | |||||
| Current operating lease liabilities | 534,451 | 607,490 | |||||
| Deferred revenue | 1,788,555 | 1,499,880 | |||||
| Total Current Liabilities | 25,612,668 | 22,825,589 | |||||
| Long-term Liabilities | |||||||
| Noncurrent operating lease liabilities | 1,206,082 | 1,178,544 | |||||
| Contingent consideration | 5,701,000 | 100,000 | |||||
| Purchase price payable | 1,415,655 | - | |||||
| Total Liabilities | 33,935,405 | 24,104,133 | |||||
| Commitments and Contingencies | |||||||
| Mezzanine Equity | |||||||
| Preferred Stock, $0.0001 par value; 5,000,000 shares authorized | |||||||
| Series B Preferred Stock, $0.0001 par value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,207 and $1,175 per share as of March 31, 2022 and December 31, 2021, respectively | 4,223,014 | 4,110,822 | |||||
| Stockholders’ Equity | |||||||
| Series A Preferred Stock, $0.0001 par value; 1,610,000 shares authorized, 1,400,000 shares issued and outstanding, liquidation value approximately $26.17 and $25.62 per share as of March 31, 2022 and December 31, 2021, respectively | 140 | 140 | |||||
| Common Stock, $0.01 par value; 100,000,000 shares authorized, 30,899,469 and 30,704,434 shares issued, 30,796,429 and 30,601,394 outstanding as of March 31, 2022 and December 31, 2021, respectively | 308,995 | 307,045 | |||||
| Additional paid-in capital | 169,026,965 | 164,517,634 | |||||
| Accumulated deficit | (155,997,323 | ) | (141,921,085 | ) | |||
| Treasury stock, 103,040 and 103,040 shares, at cost | (163,701 | ) | (163,701 | ) | |||
| Total LifeMD, Inc. Stockholders’ Equity | 13,175,076 | 22,740,033 | |||||
| Non-controlling interest | (1,043,019 | ) | (1,031,745 | ) | |||
| Total Stockholders’ Equity | 12,132,057 | 21,708,288 | |||||
| Total Liabilities, Mezzanine Equity and Stockholders’ Equity | $ | 50,290,476 | $ | 49,923,243 | |||
| LIFEMD, INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (Unaudited) | |||||||
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
| Revenues | |||||||
| Telehealth revenue, net | $ | 22,598,061 | $ | 13,283,315 | |||
| WorkSimpli revenue, net | 6,444,776 | 4,914,797 | |||||
| Total revenues, net | 29,042,837 | 18,198,112 | |||||
| Cost of revenues | |||||||
| Cost of telehealth revenue | 5,086,068 | 3,123,025 | |||||
| Cost of WorkSimpli revenue | 162,107 | 88,032 | |||||
| Total cost of revenues | 5,248,175 | 3,211,057 | |||||
| Gross profit | 23,794,662 | 14,987,055 | |||||
| Expenses | |||||||
| Selling and marketing expenses | 21,909,825 | 18,640,731 | |||||
| General and administrative expenses | 12,302,478 | 7,021,541 | |||||
| Other operating expenses | 1,327,734 | 636,787 | |||||
| Customer service expenses | 933,307 | 295,277 | |||||
| Development costs | 428,333 | 311,056 | |||||
| Total expenses | 36,901,677 | 26,905,392 | |||||
| Operating loss | (13,107,015 | ) | (11,918,337 | ) | |||
| Interest expense, net | (167,934 | ) | (139,463 | ) | |||
| Gain on debt forgiveness | - | 184,914 | |||||
| Net loss | (13,274,949 | ) | (11,872,886 | ) | |||
| Net income (loss) attributable to noncontrolling interests | 24,726 | (270,503 | ) | ||||
| Net loss attributable to LifeMD, Inc. | (13,299,675 | ) | (11,602,383 | ) | |||
| Preferred stock dividends | (776,563 | ) | - | ||||
| Net loss attributable to LifeMD, Inc. common stockholders | $ | (14,076,238 | ) | $ | (11,602,383 | ) | |
| Basic loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.46 | ) | $ | (0.47 | ) | |
| Diluted loss per share attributable to LifeMD, Inc. common stockholders | $ | (0.46 | ) | $ | (0.47 | ) | |
| Weighted average number of common shares outstanding: | |||||||
| Basic | 30,853,118 | 24,467,788 | |||||
| Diluted | 30,853,118 | 24,467,788 | |||||
| LIFEMD, INC. | |||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Unaudited) | |||||||
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
| Net loss | $ | (13,274,949 | ) | $ | (11,872,886 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Amortization of debt discount | - | 80,051 | |||||
| Amortization of capitalized software | 383,812 | 24,451 | |||||
| Amortization of intangibles | 114,394 | 83,903 | |||||
| Depreciation of fixed assets | 32,477 | - | |||||
| Gain on forgiveness of dent | - | (184,914 | ) | ||||
| Operating lease payments | 118,524 | 24,588 | |||||
| Stock compensation expense | 4,472,781 | 2,325,775 | |||||
| Changes in Assets and Liabilities | |||||||
| Accounts receivable | (816,447 | ) | (703,022 | ) | |||
| Product deposit | (411,737 | ) | (483,478 | ) | |||
| Inventory | 383,734 | (410,123 | ) | ||||
| Other current assets | (49,799 | ) | 50,075 | ||||
| Change in operating lease liability | (45,501 | ) | (21,922 | ) | |||
| Deferred revenue | 288,675 | 422,429 | |||||
| Accounts payable | 2,477,466 | 124,633 | |||||
| Accrued expenses | (1,764,573 | ) | 1,433,611 | ||||
| Net cash used in operating activities | (8,091,143 | ) | (9,106,829 | ) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
| Cash paid for capitalized software costs | (2,098,143 | ) | (48,860 | ) | |||
| Purchase of equipment | (267,151 | ) | - | ||||
| Purchase of intangible assets | (4,000,500 | ) | - | ||||
| Acquisition of business, net of cash acquired | (1,012,395 | ) | - | ||||
| Net cash used in investing activities | (7,378,189 | ) | (48,860 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
| Cash proceeds from private placement offering, net | - | 13,495,270 | |||||
| Cash proceeds from exercise of options | - | 24,000 | |||||
| Cash proceeds from exercise of warrants | 38,500 | - | |||||
| Preferred stock dividends | (776,563 | ) | - | ||||
| Purchase of membership interest of WorkSimpli | - | (100,000 | ) | ||||
| Distributions to non-controlling interest | (36,000 | ) | (36,000 | ) | |||
| Net cash (used in) provided by financing activities | (774,063 | ) | 13,383,270 | ||||
| Net (decrease) increase in cash | (16,243,395 | ) | 4,227,581 | ||||
| Cash at beginning of period | 41,328,039 | 9,179,075 | |||||
| Cash at end of period | $ | 25,084,644 | $ | 13,406,656 | |||
| Cash paid for interest | |||||||
| Cash paid during the period for interest | $ | - | $ | 17,271 | |||
| Non-cash investing and financing activities: | |||||||
| Cashless exercise of warrants | $ | - | $ | 300 | |||
| Cashless exercise of options | $ | 255 | $ | - | |||
| Consideration payable for Cleared acquisition | $ | 8,079,367 | $ | - | |||
| Consideration payable for ResumeBuild acquisition | $ | 500,000 | $ | - | |||
| Principal of Paycheck Protection Program loans forgiven | $ | - | $ | 184,914 | |||
| Additional purchase of membership interest in WorkSimpli issued in performance options | $ | - | $ | 144,002 | |||
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, financing transaction expense, inventory valuation, litigation costs, preferred stock dividends, 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 LifeMD, Inc common shareholders before interest, taxes, depreciation, amortization, financing transaction expense, inventory valuation, litigation costs, preferred stock dividends, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of Adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders.
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 March 31, | |||||||
| 2022 | 2021 | ||||||
| Net loss attributable to common shareholders | $ | (14,076,238 | ) | $ | (11,602,383 | ) | |
| Interest expense (excluding debt discount and acceleration of debt) | 55,742 | 17,271 | |||||
| Depreciation & amortization expense | 530,683 | 152,743 | |||||
| Amortization of debt discount | - | 80,051 | |||||
| Gain on debt forgiveness | - | (184,914 | ) | ||||
| Financing transactions expense | 152,015 | 125,979 | |||||
| Litigation costs | 48,865 | - | |||||
| Inventory valuation adjustment | 216,953 | - | |||||
| Severance costs | 101,849 | - | |||||
| Acquisitions expenses | 25,000 | - | |||||
| Accrued interest on Series B Convertible Preferred Stock | 112,192 | 122,192 | |||||
| Preferred dividends | 776,563 | - | |||||
| Stock-based compensation expense | 4,472,781 | 2,325,775 | |||||
| Adjusted EBITDA | $ | (7,583,595 | ) | $ | (8,963,286 | ) | |
| Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS | |||||||
| Three Months Ended March 31, | |||||||
| 2022 | 2021 | ||||||
| Diluted loss per share attributable to LifeMD, Inc. common shareholders | $ | (0.46 | ) | $ | (0.47 | ) | |
| Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS | |||||||
| Interest expense (excluding debt discount and acceleration of debt) | - | - | |||||
| Depreciation & amortization expense | 0.02 | - | |||||
| Amortization of debt discount | - | - | |||||
| Gain on debt forgiveness | - | (0.01 | ) | ||||
| Financing transactions expense | 0.01 | 0.01 | |||||
| Litigation costs | - | - | |||||
| Inventory valuation adjustment | 0.01 | - | |||||
| Severance costs | - | - | |||||
| Acquisitions expenses | - | - | |||||
| Accrued interest on Series B Convertible Preferred Stock | - | - | |||||
| Preferred dividends | 0.03 | - | |||||
| Stock-based compensation expense | 0.14 | 0.10 | |||||
| Adjusted EPS | $ | (0.25 | ) | $ | (0.37 | ) | |
