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LifeMD Reports Q1 2021 Revenue up 323% to Record $18.2M, Raises Full Year Revenue Guidance to $90-$100M

·16 min read
  • 92% of Q1 2021 revenue was generated by subscriptions, up from 75% in Q1 2020

  • Total patients and customers served nationwide surpassed 320,000

  • Gross Margins of 82%, up 13% from the same year-ago period

  • Total Telehealth Order volume grew by 373% versus year ago period to 164,452

NEW YORK, May 13, 2021 (GLOBE NEWSWIRE) -- LifeMD, Inc. (“the Company”) (NASDAQ: LFMD), a leading direct-to-patient telehealth company, today reported results for the first quarter ended March 31, 2021. All quarterly comparisons are to the same year-ago period. The Company will hold a conference call at 4:30 p.m. Eastern time today to discuss the results (see dial-in information below.)

($ in 000s)

Three Months Ended March 31

Y-o-Y

Key Performance Metrics

2021

2020

% Growth

Revenue

Product (Telehealth)

$13,283

$2,956

349%

Software (LegalSimpli)

4,914

1,349

264%

Total Revenue

$18,198

$4,305

323%

Subscription Revenue as % of Total

92%

75%

Telehealth Volume

Total Telehealth Orders

164,452

34,753

373%

LegalSimpli

Active Subscribers

109,517

36,852

197%

Q1 Financial Highlights

  • Revenue increased 323% to a record $18.2 million.

  • 92% of Q1 2021 revenue was generated by subscriptions, up from 75% in Q1 2020.

  • Telemedicine orders increased 373% to more than 164,000.

  • Gross profit increased 403% to $14.9 million or 82% of revenue.

  • Cash totaled $13.4 million at March 31, 2021, versus $9.2 million at December 31, 2020. Subsequent to the end of the quarter, the Company completed a private placement with net proceeds of $13.5 million.

Q1 Operational Highlights

  • Total patients and customers served nationwide surpassed 320,000.

  • At the end of the first quarter of 2021, launched Nava MD™, a tele-dermatology and skincare brand that offers virtual medical treatment from dermatologists and other providers. Nava MD’s proprietary products leverage intellectual property and proprietary formulations licensed from Restorsea, a leading skincare technology platform.

  • In the quarter, the Company changed its name from Conversion Labs to Life MD™, reflecting its evolution and expansion from a branded telemedicine products company into a leading provider of end-to-end concierge telehealth services.

  • Expanded the management team with the appointments of a Chief Medical Officer, Chief Financial Officer, Chief Digital Officer, Chief Business Officer, and Corporate Controller.

Management Commentary

“As a rising leader in telehealth, we’re extremely pleased with the evolution of LifeMD into a powerful end-to-end patient-centric digital health platform. Having addressed the needs of over 320,000 patients and customers across 50 states, we are creating converts and advocates of virtual healthcare,” noted LifeMD Chairman and CEO, Justin Schreiber. “I’m especially pleased with the management and leadership team that have chosen to join LifeMD on our journey. We are a company which has been built from the ground up to support the expansion of telehealth and its new role in the transformation of patient care.”

“What has been encouraging in the new year, is just how quickly telehealth has been adopted to become a permanent part of the healthcare continuum. The new modality has eased the burden of physician workflow within the healthcare system and patients have embraced virtual treatment as a result of its improved cost, accessibility and convenience. In support of this rapid adoption, the Company is leveraging its digital technology platform with unlimited scalability across new verticals, products and services. As LifeMD continues to support the adoption of telehealth, we are now able to set the stage for balanced growth and multiple pathways to profitability,” concluded Mr. Schreiber.

Marc Benathen, CFO commented, “We are extremely pleased with LifeMD’s performance in the period as we continue to overlay new products, services and plan for launches into new healthcare indications and verticals. In doing so, we continue to ramp the business in support of growing revenues and an increasing subscriber base with the goal of working towards profitability. We have also recently begun to hone in on our KPI’s and unit economics and in doing so, reduced our cash burn on a go forward basis by approximately 30% due mostly to more efficient acquisition spend while maintaining an aggressive revenue growth trajectory. This burn will continue to further reduce as we scale our company. Based on the strong results of Q1 and continued momentum resulting from our strong recurring subscription revenue model, we are now increasing our Full Year 2021 Revenue Guidance to $90 to $100 million.”

Q1 2021 Financial Summary

  • Revenue in the first quarter of 2021 increased 323% to a record $18.2 million from $4.3 million in the same year-ago quarter. The growth in revenue was primarily driven by a 349% increase in telemedicine product revenues.

  • The company’s LegalSimpli subsidiary, a PDF software-as-a-service (SaaS), contributed net sales of $4.9 million, up 264% from the year-ago quarter.

  • Including $1.3 million in deferred revenue associated with recurring subscriptions, adjusted revenues on a non-GAAP basis would total $19.5 million for the first quarter of 2021.

  • Gross profit in the first quarter increased 403% to $14.9 million, compared to $3.0 million in the same year-ago quarter. Gross margin in the first quarter of 2021 increased to 82% from 69% in the same year-ago quarter. The increase of 13% was principally attributable to lower product costs, growth of our prescription business and more stringent inventory management.

  • Operating expense in the first quarter of 2021 was $26.8 million, up from $4.7 million in the same year-ago quarter. The increase was primarily due to increases of selling and marketing expenses of $15.9 million driven by growth in discretionary customer acquisition spend, general and administrative expenses of $5.2 million, other operating expenses of $737,000, customer services expenses of $127,000, and development cost of $114,000. G&A expenses for first quarter of 2021 also included non-cash expenses for stock-based compensation and amortization of $2.3 million.

  • Net loss attributable to common stockholders for the first quarter of 2021 was $11.6 million or $(0.47) per share, as compared to a net loss attributable to common stockholders of $2.4 million or $(0.23) per share in the first quarter of 2020.

  • Excluding $2.3 million related to non-cash stock-based compensation expense, Adjusted EPS, a non-GAAP term, totaled a loss of $(0.38) per share for the first quarter of 2021 as compared to a loss of $(0.22) per share for the first quarter of 2020. (see definition of this non-GAAP term and reconciliation to GAAP, below).

  • Adjusted EBITDA, a non-GAAP term, totaled a loss of $8.9 million in the first quarter of 2021, compared to an Adjusted EBITDA loss of $556,000 in the same year-ago quarter (see definition of this non-GAAP term and reconciliation to GAAP, below).

  • Cash totaled $13.4 million at March 31, 2021, as compared to $9.2 million at December 31, 2020. The increase was primarily due to a private placement with net proceeds of $13.5 million completed in February 2021.

2021 Financial Outlook

For the full year 2021, the company is raising its revenue guidance to $90 million to $100 million from its previous guidance of $85 to $95 million. The current guidance represents revenue growth of 141% to 168% versus prior year.

Conference Call
LifeMD’s management will host a conference call followed by a question and answer session to discuss the company’s financial results and outlook.

Date: Thursday, May 13, 2021
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-866-269-4260
International dial-in number: 1-720-452-9102
Conference ID: 3530318
Webcast: http://public.viavid.com/index.php?id=144808

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 https://ir.lifemd.com.

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.

Anyone listening to the call is encouraged to read the company's periodic reports on file with the Securities and Exchange Commission, including the discussion of risk factors and historical results of operations and financial condition in those reports.

About LifeMD
LifeMD, Inc. is a rapidly growing direct-to-patient telehealth company that offers cash pay virtual medical treatment, prescription medications and over the counter products to patients across all 50 states. LifeMD's telemedicine platform enables virtual access to affordable and convenient medical treatment from licensed providers and, when appropriate, prescription medications and over-the-counter products delivered directly to the patient's home. 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 and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things our plans, strategies and prospects - both business and financial. While we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Many of the forward-looking statements contained in this news release may be identified by the use of forward-looking words such as "believe," "expect," "anticipate," "should," "planned," "will," "may," "intend," "estimated," and "potential," among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this news release include market conditions and those set forth in reports or documents that we file from time to time with the United States Securities and Exchange Commission. All forward-looking statements attributable to LifeMD, Inc. or a person acting on its behalf are expressly qualified in their entirety by this cautionary language.

LIFEMD, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

March 31, 2021

December 31, 2020

ASSETS

Current Assets

Cash

$

13,406,656

$

9,179,075

Accounts receivable, net

1,351,443

648,421

Product deposit

1,300,243

816,765

Inventory, net

1,674,381

1,264,258

Other current assets

104,801

154,876

Total Current Assets

17,837,524

$

12,063,395

Non-current assets

Right of use asset, net

249,848

274,437

Capitalized software, net

400,392

375,983

Intangible assets, net

255,937

339,840

Total non-current assets

906,177

990,260

Total Assets

$

18,743,701

$

13,053,655

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' DEFICIT

Current Liabilities

Accounts payable and accrued expenses

$

13,430,136

$

11,794,084

Notes payable, net

674,269

779,132

Deferred revenue

1,339,309

916,880

Total Current Liabilities

15,443,714

13,490,096

Long-term Liabilities

Lease Liability

263,401

285,323

Contingent consideration on purchase of LegalSimpli

100,000

100,000

Total Liabilities

15,807,115

13,875,419

Mezzanine Equity

Preferred Stock, $0.0001 per value; 5,000,000 shares authorized

Series B Preferred Stock, $0.0001 per value; 5,000 shares authorized, 3,500 and 3,500 shares issued and outstanding, liquidation value approximately, $1,045 and $1,045 per share as of March 31, 2021 and December 31, 2020, respectively

3,778,014

3,655,822

Stockholders’ Deficit

Common stock, $0.01 par value; 100,000,000 shares authorized, 25,885,014 and 23,433,663
shares issued, 25,781,974 and 23,330,623 outstanding as of March 31, 2021 and December 31, 2020, respectively

258,851

234,337

Additional paid-in capital

91,585,607

77,779,370

Accumulated deficit

(91,754,288

)

(80,151,905

)

90,170

(2,138,198

)

Treasury stock, 103,040 and 103,040 shares, at cost

(163,701

)

(163,701

)

Total LifeMD, Inc. Stockholders’ Deficit

(73,531

)

(2,301,899

)

Non-controlling interest

(767,896

)

(2,175,687

)

Total Stockholders’ Deficit

(841,427

)

(4,477,586

)

Total Liabilities, Mezzanine Equity and Stockholders’ Deficit

$

18,743,701

$

13,053,655


LIFEMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended March 31,

2021

2020

Net Revenues

Product revenues, net

$

13,283,315

$

2,955,801

Software revenues, net

4,914,797

1,349,011

Service revenues, net

-

Total Revenues, net

18,198,112

4,304,812

Cost of product revenue

3,123,025

1,252,747

Cost of software revenue

140,228

84,903

Cost of revenues

3,263,253

1,337,650

Gross Profit

14,934,859

2,967,162

Expenses

Selling & marketing expenses

18,640,731

2,745,882

General and administrative expenses

6,863,879

1,590,967

Other operating expenses

861,081

124,491

Customer service expenses

295,277

168,185

Development Costs

192,228

78,142

Total expenses

26,853,196

4,707,667

Operating Loss

(11,918,337

)

(1,740,505

)

Other Income (Expenses)

Interest expense, net

(139,463

)

(793,039

)

Gain on debt forgiveness

184,914

-

45,451

(793,039

)

Net Loss before provision for income taxes

(11,872,886

)

(2,533,544

)

Provision for income taxes

-

-

Net Loss

(11,872,886

)

(2,533,544

)

Net (loss) attributable to noncontrolling interests

(270,503

)

(138,816

)

Net loss attributable to LifeMD, Inc. common stockholders

$

(11,602,383

)

$

(2,394,728

)

Basic loss per share attributable to LifeMD, Inc. common stockholders

$

(0.47

)

$

(0.23

)

Diluted loss per share attributable to LifeMD, Inc. common stockholders

$

(0.47

)

$

(0.23

)

Weighted Average number of common shares outstanding:

Basic

24,467,788

10,697,767

Diluted

24,467,788

10,697,767


LIFEMD, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Three Months Ended March 31,

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss

$

(11,872,886

)

$

(2,533,544

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Amortization of debt discount

80,051

191,247

Amortization of capitalized software

24,451

2,551

Amortization of intangibles

83,903

83,903

Acceleration of debt discount

-

500,145

Gain on forgiveness of debt

(184,914

)

-

Operating lease payments

2,666

1,309

Stock compensation expense

2,325,775

95,900

Liability to issue shares for services

-

873,000

Changes in Assets and Liabilities

Accounts receivable

(703,022

)

(185,034

)

Product deposit

(483,478

)

89,168

Inventory

(410,123

)

395,774

Other current assets

50,075

126,604

Deferred revenue

422,429

193,408

Accounts payable and accrued expenses

1,558,244

826,924

Net cash (used in) provided by operating activities

(9,106,829

)

661,355

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for capitalized software costs

(48,860

)

(68,400

)

Payment to seller for contingent consideration

-

(400,000

)

Net cash used in investing activities

(48,860

)

(468,400

)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash proceeds from private placement offering, net

13,495,270

-

Cash proceeds from exercise of options

24,000

-

Purchase of membership interest of LSS

(100,000

)

-

Distributions to non-controlling interest

(36,000

)

(36,000

)

Proceeds from note payable

750,000

Repayment of notes payable

(1,640,702

)

Debt issuance costs

(15,000

)

Net cash provided by (used in) financing activities

13,383,270

(941,702

)

Net increase (decrease) in cash

4,227,581

(748,747

)

Cash at beginning of period

9,179,075

1,106,624

Cash at end of period

$

13,406,656

$

357,877

Cash paid for interest

Cash paid during the period for interest

$

17,271

$

101,600

Non-cash investing and financing activities:

Cashless exercise of warrants

$

300

$

1,479

Principal of Paycheck protection Program loans forgiven

$

184,914

$

-

Deemed dividend from warrant price adjustments

$

-

$

1,142,385

Stock yet to be issued for capitalized costs

$

-

$

40,000

Deemed distribution from down-round provision on unissued shares

$

-

$

106,522

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, which are 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 expense, acceleration of debt discount, inventory valuation adjustment/write off, warrant settlements, accrued interest/deemed distributions, and stock-based compensation expense.

Adjusted EPS is defined as the diluted net loss attributable to LifeMD, Inc common shareholders before stock-based compensation expense.

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. None of adjusted EBITDA or adjusted EPS should be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with GAAP as measures of performance.

The following is a reconciliation of Net loss attributable to common shareholders, the most directly comparable GAAP financial measure, to adjusted EBITDA:

Reconciliation of GAAP Net Loss to Adjusted EBITDA

(in whole numbers, unaudited)

Three months ended March 31,

2021

2020

Net (loss) attributable to common shareholders

$

(11,602,383

)

$

(2,394,728

)

Interest expense (excluding debt discount and acceleration of debt)

17,271

101,647

Depreciation & Amortization Expense

152,743

86,545

Amortization of debt discount

-

191,247

Financing transactions expense

125,979

62,012

Acceleration of debt discount

-

500,145

Inventory valuation adjustment

-

769,378

Accrued interest on Series B Stock

122,192

-

Stock-based compensation expense

2,325,775

127,900

Adjusted EBITDA

$

(8,858,424

)

$

(555,854

)

The following is a reconciliation of GAAP diluted loss per share attributable to common shareholders, the most directly comparable GAAP financial measure, to adjusted EPS:

Reconciliation of GAAP Diluted Loss per Share Attributable to Common Shareholders to Adjusted EPS

Three months ended March 31,

2021

2020

Diluted loss per share attributable to LifeMD, Inc. common shareholders

$

(0.47

)

$

(0.23

)

Adjustments to Reconcile GAAP Diluted Loss Per Share to Adjusted EPS

Stockholders Compensation Expense

$

0.10

$

0.01

Adjusted EPS

$

(0.38

)

$

(0.22

)

Company Contact
LifeMD, Inc.
Marc Benathen, CFO
Email Contact

Investor Relations Contact
Ashley Robinson
LifeSci Advisors, LLC
arr@lifesciadvisors.com