1.866.648.2767
    info@tabularasahealthcare.com

    Tabula Rasa HealthCare Reports Second Quarter 2020 Results

    Investors - Press Releases

    << Back
    View printer-friendly version

    Tabula Rasa HealthCare Reports Second Quarter 2020 Results

    04 Aug 2020

    MOORESTOWN, N.J., Aug. 04, 2020 (GLOBE NEWSWIRE) -- Tabula Rasa HealthCare, Inc. (“TRHC”) (NASDAQ:TRHC), a healthcare technology company advancing the field of medication safety, today reported financial results for the second quarter ended June 30, 2020.

    Second Quarter 2020 Highlights

    • Total revenue of $76.8 million, which is within our guidance range of $76.0 million to $81.0 million for the second quarter of 2020, was up 1% as compared to the second quarter of 2019.
    • Non-GAAP Adjusted EBITDA of $7.1 million, which is within our guidance range of $7.0 million to $9.0 million for the second quarter of 2020, declined as compared to $13.7 million for the same period in 2019, which marked a record high for any quarter in company history.
    • Non-GAAP Adjusted Diluted EPS declined to $0.07 as compared to $0.35 during the same period in 2019.
    • CareVention HealthCare revenue increased 13% to $50.5 million, driven by organic PACE product revenue growth.
    • MedWise HealthCare revenue decreased 16% to $26.4 million, driven by the expected decline in medication safety services, partially offset by software subscriptions growth on a reported basis of 14%. Medication safety services increased 10% on a sequential basis as compared to the first quarter of 2020, driven by strong growth in the number of total clinical interventions performed.
    • Due to COVID-19, bookings were relatively flat as compared to the second quarter of 2019, driven by a decline within our CareVention HealthCare segment which offset continued growth within our MedWise HealthCare segment, led by another strong quarter of sales to health plans. Notable new contractual relationships include a national retail chain, a large supermarket chain and a senior-focused network of primary care centers. In addition to these new bookings, we entered into a multi-year contract renewal with one of our top five PACE clients in terms of membership and revenue.
    • Our overall sales pipeline has continued to grow, driven by our two largest end-markets (PACE and health plans), which combined are 73% higher as of July 1, 2020 as compared to January 1, 2020.

    “I am pleased with our second quarter performance as our revenue and Adjusted EBITDA results were within our guidance range despite COVID-19 related challenges that became significantly more pronounced in May and June across our primary target markets. Our PACE census trends have shown continued improvement during June, July and August but our overall enrollment growth remains below historical levels, largely due to slower-than-expected growth within our clients’ existing PACE centers as they continue to deal with the pandemic. In addition, following our record sales in the first quarter of 2020, our MedWise HealthCare segment experienced delays in the timing of implementations and closing new business during the second quarter. We remain encouraged by positive signs within our CareVention HealthCare segment, continued healthy growth in our sales pipeline, and our efforts to broaden the adoption of our medication science as evidenced by the major launch of MedWise for our PrescribeWellness community pharmacists,” said Calvin H. Knowlton, PhD, TRHC’s Chief Executive Officer, Chairman and Founder.

    Second Quarter 2020 Results

    All comparisons, unless otherwise noted, are to the three months ended June 30, 2019.

    • Total revenue - Total revenue of $76.8 million was up 1% as compared to $76.3 million. Total revenue included product revenue of $39.4 million, an increase of 18%, and solutions (i.e. software and services) revenue of $37.5 million, a decrease of 13%. On a sequential basis compared to the first quarter of 2020, total revenue increased 6%. Product revenue of $39.4 million includes $0.4 million related to the initial sales of COVID-19 test kits through our PrescribeWellness pharmacy network.
       
    • Total revenue by segment - CareVention HealthCare revenue increased 13% to $50.5 million, comprised of $38.9 million of PACE product revenue (a 17% increase) and $11.5 million of PACE solutions revenue (a 1% increase), the latter of which remains negatively impacted by the renegotiated contract we highlighted during the quarter ended March 31, 2020. Excluding that unique contract from the first quarter results, PACE solutions revenue would have increased by 9%. MedWise HealthCare revenue decreased 16% to $26.4 million, comprised of $15.7 million (a 30% decrease) of medication safety services and $10.2 million (a 14% increase) of software subscriptions. Medication safety services increased 10% on a sequential basis as compared to the first quarter of 2020, driven by a higher number of total clinical interventions performed. As previously discussed, the expected year-over-year decline in the second quarter of 2020 was driven by CMS Star Rating changes and a large client contract that boosted our 2019 results to record levels.
       
    • Gross margin - Gross margin, excluding depreciation and amortization expense, was 32.7% compared to 40.8% a year ago. Product gross margin increased to 26.2% from 25.5% and service gross margin decreased to 39.5% from 52.7%, driven by the decline in medication safety services. Software-related revenue, largely comprised of software subscriptions, represented 18% of total revenue as compared with 17% a year ago.
       
    • Non-GAAP Adjusted EBITDA - Non-GAAP Adjusted EBITDA of $7.1 million declined as compared to $13.7 million a year ago, driven entirely by lower revenue and profitability in our MedWise HealthCare segment. Non-GAAP Adjusted EBITDA margin decreased to 9.3% as compared to 17.9% a year ago, the latter of which represented a company record high, benefiting from record MedWise HealthCare performance.
       
    • Non-GAAP Adjusted EBITDA by segment - Excluding $9.7 million of shared services allocated to corporate, CareVention HealthCare non-GAAP Adjusted EBITDA of $12.1 million (23.9% margin) increased 5% as compared to $11.5 million (25.6% margin) a year ago. MedWise HealthCare non-GAAP Adjusted EBITDA of $4.7 million (17.8% margin) decreased as compared to $9.1 million (28.8% margin) a year ago due to lower medication safety services but improved on a sequential basis from the first quarter of 2020 (11.7% margin).
       
    • GAAP Net loss - Net loss was $14.3 million compared to a net loss of $6.5 million a year ago. The primary factors contributing to the net loss were stock-based compensation expense of $7.2 million, depreciation and amortization of $10.2 million, and interest expense of $4.7 million.
       
    • GAAP EPS - Net loss per diluted share was $0.66 compared to $0.32 a year ago. The net loss per share calculations were based on a diluted share count of 21.6 million shares for the second quarter of 2020, compared to 20.5 million shares for the same period a year ago.
       
    • Non-GAAP EPS - Non-GAAP Adjusted net income per diluted share, or Adjusted Diluted EPS, was $0.07 as compared to $0.35 a year ago. The net income per share calculations were based on a diluted share count of 23.5 million shares for the second quarter of 2020, compared to 22.8 million shares for the same period a year ago.
       
    • Cash - Unrestricted cash at the end of the second quarter of 2020 was $38.8 million as compared to $38.1 million at the end of the first quarter of 2020 and $42.5 million at the end of 2019. The change in cash through the first six months of 2020 was driven by net cash provided by operating activities of $3.4 million, offset by software development costs of $8.9 million. As of the end of the second quarter of 2020, no amounts were drawn on our $60 million line of credit.

    A reconciliation of generally accepted accounting principles (“GAAP”) in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

    Financial Outlook

    Our guidance is based on current market conditions and our expectations as of today.

    For the third quarter 2020 ending September 30, we expect:

    • Total revenue in the range of $74 million to $78 million, the mid-point of which represents 2% growth compared to the third quarter of 2019.
    • GAAP net loss in the range of $15.1 million to $13.3 million.
    • Non-GAAP adjusted EBITDA in the range of $7 million to $9 million.

    For the full year 2020 ending December 31, we expect:

    • Revenue in the range of $300 million to $310 million, the mid-point of which represents 7% growth compared to the full 2019 fiscal year. The key factors, in order of importance, impacting our revised guidance are: (1) COVID-19 related delays in closing health plan deals with project timelines in some cases shifting to 2021, resulting in a lower contribution from new business wins, (2) COVID-19 related slower census growth in our PACE population, (3) implementation delays with several contracts won during the first quarter of 2020, including with respect to one of our largest deals within our MedWise HealthCare segment, to 2021, originally anticipated to go-live during the second quarter of 2020, and (4) the cancellation of all of the major pharmacy tradeshows in the third quarter of 2020, negatively impacting a key selling season for PrescribeWellness.
    • GAAP net loss in the range of $58.5 million to $53.3 million.
    • Non-GAAP Adjusted EBITDA in the range of $27 million to $33 million. Our profitability outlook is disproportionately impacted by our lower revenue guidance as we plan to continue to invest in strategic initiatives and maintain the necessary level of resources to support our early views on 2021 growth. As a reference point, our corporate shared services totaled $19.4 million through the first half of 2020, which is 44%, or $6.0 million higher, as compared to the first half of 2019.
    • Free cash flow, excluding capitalized software and capital expenditures, in the range of breakeven to $5 million.

    2021

    Given our modest revenue growth outlook for the second half of 2020, we thought it would be important to provide our initial thoughts for 2021. Currently, we see a path to return to our historical organic growth rates and this optimism is based on a number of factors. Starting with CareVention HealthCare, (1) our recent PACE census figures from June through August are showing continued improvement after a low point in May, (2) we have a large number of new PACE clients and expansions with existing clients launching in the second half of 2020 with a greater emphasis on the fourth quarter of 2020 and 2021 and our PACE center backlog represents growth of 25% as compared to our ending PACE center total as of July 31, 2020, and (3) we have late-stage deals that we expect to complete in the second half of 2020 that represent a few thousand PACE lives and well in excess of $10 million in annual revenue. With respect to our MedWise HealthCare segment, we have delivered strong results for new health plan accounts during the first half of 2020 that have the potential to deliver exponentially higher revenue in 2021 with active expansion discussions ongoing. With master service agreements in place and proven outcomes, we expect shorter sales cycles and higher conversion rates with some of nation’s largest health plans. In addition, our key pharmacy win announced last quarter has the potential to drive double-digit growth in our 2021 software subscriptions. Lastly, 2021 profitability is expected to grow at a materially faster rate than revenue as we reap the benefits of our heavy investment spend in 2019 and the first half of 2020.

    Upcoming Events

    Brian Adams, TRHC’s Chief Financial Officer, and Frank Sparacino, TRHC’s SVP of Investor Relations and Corporate Development, will be presenting at the following conferences: (1) Verity Research Virtual HCIT & Services Conference on Wednesday, August 12, 2020 (2) 2020 Wells Fargo Virtual Healthcare Conference on September 9, 2020 and (3) Baird’s 2020 Global Healthcare Conference on September 10, 2020.

    Quarterly Conference Call

    The second quarter 2020 earnings conference call and webcast will be held tomorrow, Wednesday, August 5, 2020, at 8:00 a.m. ET. The conference call can be accessed by dialing 844-413-0947 for U.S. participants or 216-562-0423 for international participants, and referencing passcode 7358617 or via a live audio webcast available online at TRHC’s investor website (ir.trhc.com). An audio webcast replay will be available approximately two hours after completion of the call for a period of 90 days thereafter at ir.trhc.com and a replay will be available for seven days by dialing 855-859-2056 for U.S. participants or 404-537-3406 for international participants and referencing passcode 7358617.

    About Tabula Rasa HealthCare

    Tabula Rasa HealthCare (NASDAQ: TRHC) is innovating the next frontier of medication safety, creating solutions designed to empower pharmacists and providers to optimize medication regimens. Our advanced proprietary technology, MedWise™, identifies adverse drug events, so healthcare professionals can minimize harm and reduce medication-related risks. Our software and services help improve patient outcomes, reduce hospitalizations and lower healthcare costs. TRHC also believes it has the most extensive clinical tele-pharmacist network in the United States. Our suite of solutions is trusted by health plans and pharmacies nationwide to assist them in driving value-based payment results. For more information, visit: www.trhc.com.

    Non-GAAP Financial Measures

    In addition to reporting all financial information required in accordance with GAAP, TRHC is also reporting gross margin excluding depreciation and amortization expense, Adjusted EBITDA and Adjusted Diluted EPS, each of which is considered a non-GAAP financial measure. Generally, a non-GAAP financial measure is a numerical measure of a company's performance or financial position that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP.

    Gross margin is calculated as total revenue minus total cost of revenue, exclusive of depreciation and amortization (as presented in the Consolidated Statements of Operations), as a percentage of total revenue. Product margin is calculated as product revenue minus cost of product revenue, exclusive of depreciation and amortization (as presented in the Consolidated Statements of Operations), as a percentage of product revenue. Service margin is calculated as service revenue minus cost of service revenue, exclusive of depreciation and amortization (as presented in the Consolidated Statements of Operations), as a percentage of service revenue.

    Adjusted EBITDA consists of net income or loss excluding certain other expenses, which includes interest expense, provision (benefit) for income tax, depreciation and amortization, change in fair value of acquisition-related contingent consideration (income) expense, acquisition-related expense and stock-based compensation expense. TRHC defines Adjusted Diluted EPS as net income or loss before fair value adjustments for acquisition-related contingent consideration, amortization of acquired intangibles, amortization of debt discount and issuance costs, acquisition-related expense, stock-based compensation expense, and the tax impact of those items using a normalized tax rate on pre-tax income adjusted for those items expressed on a per share basis using weighted average diluted shares outstanding. TRHC considers acquisition-related expense to include non-recurring direct transaction and integration costs, severance, and the impact of purchase accounting adjustments related to the fair value of acquired deferred revenue. TRHC believes the exclusion of these items assists in providing a more complete understanding of the company’s underlying operations results and trends and allows for comparability with TRHC’s peer company index and industry and to be more consistent with TRHC’s expected capital structure on a going forward basis. Please note that other companies may define their non-GAAP financial measures differently than TRHC.

    TRHC presents these non-GAAP financial measures in this release because it considers them to be important supplemental measures of performance. TRHC uses these non-GAAP financial measures for planning purposes, including analysis of the company's performance against prior periods, the preparation of operating budgets and determination of appropriate levels of operating and capital investments. TRHC believes that these non-GAAP financial measures provide additional insight for analysts and investors in evaluating the company's financial and operational performance. TRHC also intends to provide these non-GAAP financial measures as part of the company's future earnings discussions and, therefore, their inclusion should provide consistency in the company's financial reporting.

    Non-GAAP financial measures have limitations as an analytical tool. Investors are encouraged to review the reconciliation of Adjusted EBITDA and Adjusted Diluted EPS to their most directly comparable GAAP measures provided in this release, including in the accompanying tables.

    Safe Harbor Statement

    This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that we believe to be reasonable as of today’s date. Forward-looking statements give current expectations or forecasts of future events or our future financial or operating performance, and include TRHC’s expectations regarding healthcare regulations, industry trends, available opportunities to TRHC, the financial and operating performance of TRHC, the impacts of the COVID-19 pandemic and TRHC’s expectations for 2021. Such statements are identified by use of the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “should,” and similar expressions. These forward-looking statements are based on management's good-faith expectations, judgements and assumptions as of the date of this press release. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: the impacts of the current COVID-19 pandemic and other health epidemics; our continuing losses and need to achieve profitability; fluctuations in our financial results; the acceptance and use of our products and services by PACE organizations; the need to innovate and provide useful products and services; risks related to changing healthcare and other applicable regulations; our ability to maintain relationships with a specified drug wholesaler; increasing consolidation in the healthcare industry; managing our growth effectively; our ability to adequately protect our intellectual property; the requirements of being a public company; our ability to recognize the expected benefits from acquisitions on a timely basis or at all; and the other risk factors set forth from time to time in our filings with the Securities and Exchange Commission (“SEC”), including those factors discussed under the caption “Risk Factors” in our most recent annual report on Form 10-K, filed with the SEC on March 2, 2020, and in subsequent reports filed with or furnished to the SEC, copies of which are available free of charge within the Investor Relations section of the Tabula Rasa HealthCare website http://ir.trhc.com or upon request from our Investor Relations Department. Tabula Rasa HealthCare assumes no obligation and does not intend to update these forward-looking statements, except as required by law, to reflect events or circumstances occurring after today’s date.

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED CONSOLIDATED BALANCE SHEETS
    (In thousands)

                 
        June 30   December 31
        2020    2019 
    Assets         
    Current assets:             
    Cash   $  38,752     $  42,478  
    Restricted cash      3,132        4,103  
    Accounts receivable, net      36,896        29,123  
    Inventories      4,103        3,700  
    Prepaid expenses      4,173        4,299  
    Other current assets      6,577        10,835  
    Total current assets      93,633        94,538  
    Property and equipment, net      15,531        15,798  
    Operating lease right-of-use assets      22,411        22,100  
    Software development costs, net      23,422        18,501  
    Goodwill      150,760        150,760  
    Intangible assets, net      175,768        189,413  
    Other assets      1,017        1,281  
    Total assets   $  482,542     $  492,391  
    Liabilities and stockholders’ equity            
    Current liabilities:            
    Current portion of long-term debt and finance leases, net   $  8     $  125  
    Current operating lease liabilities      4,579        4,350  
    Accounts payable      7,253        8,622  
    Accrued expenses and other liabilities      26,944        26,906  
    Total current liabilities      38,784        40,003  
    Long-term debt and finance leases, net      232,658        226,294  
    Noncurrent operating lease liabilities      21,011        21,017  
    Long-term acquisition-related contingent consideration      11,400        10,800  
    Deferred income tax liability      4,781        8,656  
    Other long-term liabilities      485        73  
    Total liabilities      309,119        306,843  
                 
    Stockholders' equity:            
    Common stock      2        2  
    Treasury stock      (3,956 )      (3,865 )
    Additional paid-in capital      305,058        288,345  
    Accumulated deficit      (127,681 )      (98,934 )
    Total stockholders’ equity      173,423        185,548  
    Total liabilities and stockholders’ equity   $  482,542     $  492,391  

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
    (In thousands, except share and per share amounts)

                             
        Three Months Ended   Six Months Ended
        June 30   June 30
        2020    2019    2020    2019 
    Revenue:                  
    Product revenue   $  39,373     $  33,372     $  76,460     $  64,354  
    Service revenue      37,461        42,883        73,201        72,860  
    Total revenue      76,834        76,255        149,661        137,214  
    Cost of revenue, exclusive of depreciation and amortization shown below:                        
    Product cost      29,042        24,861        56,241        48,336  
    Service cost      22,656        20,295        43,530        38,488  
    Total cost of revenue, exclusive of depreciation and amortization      51,698        45,156        99,771        86,824  
    Operating expenses:                         
    Research and development       3,821        5,197        8,649        10,747  
    Sales and marketing      5,027        6,871        10,567        11,721  
    General and administrative       16,327        12,883        33,294        26,626  
    Change in fair value of acquisition-related contingent consideration (income) expense      (100 )      1,830        600        3,006  
    Depreciation and amortization      10,211        9,078        20,124        15,377  
    Total operating expenses       35,286        35,859        73,234        67,477  
    Loss from operations      (10,150 )      (4,760 )      (23,344 )      (17,087 )
    Interest expense, net      4,668        4,308        9,278        7,001  
    Loss before income taxes      (14,818 )      (9,068 )      (32,622 )      (24,088 )
    Income tax benefit      (508 )      (2,539 )      (3,875 )      (6,580 )
    Net loss   $  (14,310 )   $  (6,529 )   $  (28,747 )   $  (17,508 )
    Net loss per share, basic and diluted   $  (0.66 )   $  (0.32 )   $  (1.34 )   $  (0.86 )
    Weighted average common shares outstanding, basic and diluted     21,556,646       20,482,032       21,465,772       20,433,564  

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands)

                 
        Six Months Ended
        June 30
        2020    2019 
    Cash flows from operating activities:          
    Net loss   $  (28,747 )   $  (17,508 )
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:            
    Depreciation and amortization      20,124        15,377  
    Amortization of deferred financing costs and debt discount      6,566        4,603  
    Deferred taxes      (3,875 )      (6,633 )
    Stock-based compensation      14,310        13,758  
    Change in fair value of acquisition-related contingent consideration      600        3,006  
    Acquisition-related contingent consideration paid      —        (24,450 )
    Other noncash items      —        12  
    Changes in operating assets and liabilities, net of effect from acquisitions:            
    Accounts receivable, net      (7,773 )      (2,383 )
    Inventories      (403 )      (89 )
    Prepaid expenses and other current assets      3,815        (1,468 )
    Other assets      (4 )      (140 )
    Accounts payable       (1,588 )      (5,571 )
    Accrued expenses and other liabilities      (49 )      5,661  
    Other long-term liabilities      412        (40 )
    Net cash provided by (used in) operating activities      3,388        (15,865 )
                 
    Cash flows from investing activities:            
    Purchases of property and equipment      (1,447 )      (3,508 )
    Software development costs      (8,898 )      (6,618 )
    Proceeds from repayment of note receivable      —        1,000  
    Acquisitions of businesses, net of cash acquired      —        (158,762 )
    Net cash used in investing activities      (10,345 )      (167,888 )
                 
    Cash flows from financing activities:            
    Proceeds from exercise of stock options      2,312        1,536  
    Payments for debt financing costs      —        (9,477 )
    Repayments of line of credit      —        (45,000 )
    Payments of acquisition-related contingent consideration      —        (20,342 )
    Repayments of long-term debt and finance leases      (52 )      (541 )
    Proceeds from issuance of convertible senior subordinated notes      —        325,000  
    Proceeds from sale of warrants      —        65,910  
    Purchase of convertible note hedges      —        (101,660 )
    Net cash provided by financing activities      2,260        215,426  
    Net (decrease) increase in cash and restricted cash      (4,697 )      31,673  
    Cash and restricted cash, beginning of period      46,581        25,029  
    Cash and restricted cash, end of period   $  41,884     $  56,702  

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED SEGMENT RESULTS
    (In thousands)

                       
        Three Months Ended   Six Months Ended
        March 31, 2020   June 30, 2020   June 30, 2020
    Revenue                  
    CareVention HealthCare:                  
    PACE product revenue   $  37,087     $  38,930     $  76,017  
    PACE solutions      11,571        11,522        23,093  
    Total CareVention HealthCare      48,658        50,452        99,110  
                       
    MedWise HealthCare:                  
    Product revenue      —        443        443  
    Medication safety services      14,320        15,707        30,027  
    Software subscription and services      9,849        10,232        20,081  
    Total MedWise HealthCare      24,169        26,382        50,551  
                       
    Total Revenue   $  72,827     $  76,834     $  149,661  
                       
    Adjusted EBITDA                  
    CareVention HealthCare   $  11,748     $  12,077     $  23,825  
    MedWise HealthCare      2,831        4,697        7,528  
    Shared Services      (9,772 )      (9,640 )      (19,412 )
    Total Adjusted EBITDA   $  4,807     $  7,134     $  11,941  


                                   
        Three Months Ended   Year Ended
        March 31, 2019   June 30, 2019   September 30, 2019   December 31, 2019   December 31, 2019
    Revenue                              
    CareVention HealthCare:                              
    PACE product revenue   $  30,982     $  33,372     $  34,966     $  37,810     $  137,130  
    PACE solutions      11,174        11,437        11,276        12,021        45,908  
    Total CareVention HealthCare      42,156        44,809        46,242        49,831        183,038  
                                   
    MedWise HealthCare:                              
    Medication safety services      15,351        22,498        18,706        13,362        69,917  
    Software subscription and services      3,452        8,948        9,322        10,030        31,752  
    Total MedWise HealthCare      18,803        31,446        28,028        23,392        101,669  
                                   
    Total Revenue   $  60,959     $  76,255     $  74,270     $  73,223     $  284,707  
                                   
    Adjusted EBITDA                              
    CareVention HealthCare   $  10,620     $  11,466     $  12,632     $  12,773     $  47,491  
    MedWise HealthCare      1,648        9,059        5,388        2,181        18,276  
    Shares Services      (6,577 )      (6,873 )      (7,444 )      (6,952 )      (27,846 )
    Total Adjusted EBITDA   $  5,691     $  13,652     $  10,576     $  8,002     $  37,921  


    TABULA RASA HEALTHCARE, INC.

    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP MEASURES
    (In thousands except share and per share amounts)

                             
        Three Months Ended June 30   Six Months Ended June 30
        2020    2019    2020    2019 
    Reconciliation of net loss to Adjusted EBITDA                        
    Net loss   $  (14,310 )   $  (6,529 )   $  (28,747 )   $  (17,508 )
    Add:                        
    Interest expense, net      4,668        4,308        9,278        7,001  
    Income tax benefit      (508 )      (2,539 )      (3,875 )      (6,580 )
    Depreciation and amortization      10,211        9,078        20,124        15,377  
    Change in fair value of acquisition-related contingent consideration (income) expense      (100 )      1,830        600        3,006  
    Acquisition-related expense      —        598        251        4,289  
    Stock-based compensation expense      7,173        6,906        14,310        13,758  
    Adjusted EBITDA   $  7,134     $  13,652     $  11,941     $  19,343  


                                                     
        Three Months Ended June 30   Six Months Ended June 30
        2020    2019    2020    2019 
        (In thousands except per share amounts)   (In thousands except per share amounts)
    Reconciliation of diluted net loss per share to Adjusted Diluted EPS                                                
    GAAP net loss, basic and diluted, and net loss per share, basic and diluted   $  (14,310 )   $  (0.66 )   $  (6,529 )   $  (0.32 )   $  (28,747 )   $  (1.34 )   $  (17,508 )   $  (0.86 )
    Adjustments:                                                
    Change in fair value of acquisition-related contingent consideration (income) expense      (100 )            1,830              600              3,006        
    Amortization of acquired intangibles      6,823              7,084              13,645              11,751        
    Amortization of debt discount and issuance costs      3,215              2,967              6,367              4,494        
    Acquisition-related expense      —              598              251              4,289        
    Stock-based compensation expense      7,173              6,906              14,310              13,758        
    Impact to income taxes (1)      (1,109 )            (4,931 )            (4,544 )            (9,666 )      
    Adjusted net income and Adjusted Diluted EPS   $  1,692     $  0.07     $  7,925     $  0.35     $  1,882     $  0.08     $  10,124     $  0.44  


    (1) The impact to taxes was calculated using a normalized statutory tax rate applied to pre-tax loss adjusted for the respective items above and then subtracting the tax provision as determined for GAAP purposes.


                     
        Three Months Ended   Six Months Ended
        June 30   June 30
        2020   2019   2020   2019
    Reconciliation of weighted average shares of common stock outstanding, diluted, to weighted average shares of common stock outstanding, diluted for Adjusted Diluted EPS                
    Weighted average shares of common stock outstanding, basic and diluted for GAAP   21,556,646   20,482,032   21,465,772   20,433,564
    Adjustments:                
    Weighted average dilutive effect of stock options    1,332,551    1,500,839    1,358,715    1,587,926
    Weighted average dilutive effect of restricted stock    510,783    759,118    497,881    800,626
    Weighted average dilutive effect of contingent shares    58,409    21,946    66,989    25,305
    Weighted average shares of common stock outstanding, diluted for Adjusted Diluted EPS (1)    23,458,389    22,763,935    23,389,357    22,847,421


    (1) TRHC accounts for the convertible senior subordinated notes utilizing the Treasury Stock Method as the Company currently intends to settle the notes entirely or partly in cash. Under this method, the underlying shares of TRHC common stock issuable upon conversion of the notes are excluded from the calculation of diluted EPS, except to the extent that the average stock price for the reporting period exceeds their conversion price of $69.95 per share. For the three months ended June 30, 2020, there was no impact on diluted EPS from the convertible senior subordinated notes as the conversion price exceeded TRHC’s average stock price.

             

    TABULA RASA HEALTHCARE, INC.
    UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE RANGES
    (In millions)

                             
        Three Months Ended September 30, 2020   Year Ended December 31, 2020
        LOW   HIGH   LOW   HIGH
    Reconciliation from Net Loss Guidance to Adjusted EBITDA Guidance                        
    Net loss:   $  (15.1 )   $  (13.3 )   $  (58.5 )   $  (53.3 )
    Add:                        
    Interest expense      4.8        4.8        18.9        18.9  
    Income tax benefit      (2.1 )      (1.9 )      (8.2 )      (7.4 )
    Depreciation and amortization      12.1        12.1        44.9        44.9  
    Stock-based compensation expense      7.3        7.3        29.0        29.0  
    Change in fair value of contingent consideration      —        —        0.6        0.6  
    Acquisition-related expense      —        —        0.3        0.3  
    Adjusted EBITDA   $  7.0     $  9.0     $  27.0     $  33.0  

    Contacts:

    Investors
    Frank Sparacino
    fsparacino@TRHC.com 
    T: 866-648-2767

    Media
    Dianne Semingson
    dsemingson@TRHC.com
    T: 215-870-0829

    Amanda Bednar
    ABednar@trhc.com
    856-912-5714


    tabularasa-healthcare-horiz.jpg

    Source: Tabula Rasa HealthCare, Inc.