Tabula Rasa HealthCare Announces Third Quarter 2016 Operating Results

MOORESTOWN, N.J., Nov 09, 2016 (GLOBE NEWSWIRE via COMTEX) —

Tabula Rasa HealthCare, Inc. (“TRHC”) TRHC, +4.66% a leader in providing patient-specific, data-driven technology and solutions that enable healthcare organizations to optimize medication regimens to improve patient outcomes, reduce hospitalizations, lower healthcare costs and manage risk, today announced its financial results for the third quarter ended September 30, 2016.

TRHC Chairman and CEO, Calvin H. Knowlton, Ph.D., commented, “I’m pleased with our performance during our first publically reported quarter. We continue to win new business within our core market, PACE (Program of All-Inclusive Care for the Elderly, a Medicare Advantage-type plan), as well as successfully expand our Medication Risk Mitigation platform into adjacent markets with other types of health plans, further proving its scalability.”

Dr. Knowlton continued, “There is significant runway ahead of us as we continue to develop and evolve our proprietary Medication Risk Mitigation platform and address larger patient populations with our goal of improving outcomes and lowering healthcare cost.”

Financial Performance for the Three Months Ended September 30, 2016

All comparisons, unless otherwise noted, are to the three months ended September 30, 2015.

  • Total revenue was $24.2 million, an increase of 35%. Total revenue included product revenue of $20.7 million, an increase of 35%, and service revenue of $3.4 million, an increase of 34%.
  • Gross margin was 29%, compared to 32%. The year over year decline is primarily related to a mix shift in client and business make-up, as well as to staffing increases associated with upcoming contracts.
  • Net loss was $142 thousand, compared to a net loss of $3.3 million. Third quarter 2016 included a $1.4 million expense related to the early extinguishment of debt.
  • Net loss per diluted share was $0.08, compared to a net loss per share of $3.21. The net loss per share calculations were based on a diluted share count of 10.3 million for the third quarter of 2016, compared to 4.4 million shares a year ago.
  • Non-GAAP Adjusted EBITDA was $3.3 million, compared to $2.4 million, an increase of 38% compared to a year ago. Adjusted EBITDA margin of 13.5% in the third quarter of 2016 compared favorably to 13.2% during the same period in 2015.
  • Non-GAAP Adjusted net income per diluted share was $0.06, compared to a net loss per share of $0.01.

A reconciliation of GAAP to non-GAAP results has been provided in this press release in the accompanying tables. Non-GAAP results exclude change in fair value of warrant liability, loss on extinguishment of debt, change in fair value of acquisition-related contingent consideration (income) expense and stock-based compensation expense. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.

Business Outlook

Fourth Quarter 2016 Guidance: Revenue for TRHC’s fourth quarter 2016 is expected to be in the range of $25 million to $26 million. Net loss is expected to be in the range of $6 million to $7 million. Net loss projections include approximately $5 million of expense related to the extinguishment of debt associated with the early repayment of a credit facility in connection with TRHC’s initial public offering, as well as stock based compensation expense of approximately $3.5 million related to restricted stock grants and shares issued in connection with the initial public offering. Adjusted EBITDA is expected to be in the range of $3.5 million to $4.0 million.

Full Year 2016 Guidance: Revenue for fiscal year 2016 is expected to be in the range of $92 million to $93 million. Net loss is expected to be in the range of $6 million to $7 million. Net loss projections include approximately $6.4 million of expense related to the extinguishment of debt, as well as stock based compensation expense of approximately $3.6 million related to restricted stock grants and shares issued in connection with the initial public offering.  Adjusted EBITDA is expected to be in the range of $12.5 million to $13.0 million.

TRHC has not provided a reconciliation of projected GAAP Net Income to Adjusted EBITDA guidance because estimates of certain reconciling items cannot be provided without unreasonable effort. Our Adjusted EBITDA guidance for the year ending December 31, 2016, assumes anticipated losses of $6.4 million related to the extinguishment of debt, income of $0.6 million related to the remeasurement of our warrant liability, projected stock compensation of $4.2 million, projected depreciation and amortization charges of $5.1 million and interest expense of $4.5 million. In addition, we assume $0.4 million of income tax expense related to indefinite-lived deferred tax liabilities for goodwill amortization. We cannot provide a reliable forward-looking estimate of certain other reconciling items because they are either event-driven or difficult to quantify without unreasonable effort, in particular the revaluation of our contingent consideration.