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OptimizeRx Reports Third Quarter 2018 Results; Net Revenue Up 75% to a Record $5.4 Million, Driving $0.02 EPS

ROCHESTER, Mich., Nov. 05, 2018 (GLOBE NEWSWIRE) -- OptimizeRx Corp. (OPRX), a leading provider of digital health messaging for the pharmaceutical industry, reported results for the third quarter ended September 30, 2018. Quarterly comparisons are to the same year-ago quarter.

Financial Highlights

  • Net revenue increased 75% to a record $5.4 million.
  • Gross margin improved from 58.1% to 45.1%.
  • Operating expense as a percentage of net revenue reduced from 55% to 42%.
  • Net income of $245,000 or $0.02 per diluted share vs. a loss

Operational Highlights

  • Acquired CareSpeak Communications, a leader in interactive health messaging for improved medication adherence and care coordination, expanding OptimizeRx’s reach to communicate directly to patients, resulting in greater medication adherence, persistence and affordability.
  • Partnered with Medicom Health, a software company that creates evidence-based health and wellness applications for enriched online consumer engagement at more than 600 hospitals nationwide.
  • Launched a 2:1 return-on-investment (ROI) guarantee to pharmaceutical manufacturers who invest in the company’s financial messaging solutions.
  • Signed new pharmaceutical manufacturer brands for distributing digital health messaging through OptimizeRx’s expanding network of EHR channel partners.

Financial Summary
Net revenue in the third quarter of 2018 increased 75% to a record $5.4 million versus $3.1 million in the same year-ago quarter. The increase was primarily due to growth in OptimizeRx’s two core products of financial and brand messaging, coupled with broader distribution through the company’s new channel partners. The launch of new pharmaceutical brands also contributed to the increase.

Gross margin improved to 58.1% in the third quarter of 2018 from 45.1% in the year-ago quarter. The improvement was due to favorable product mix and reduced revenue share cost.

The company remains focused on improving margins, and maintains its gross margin target of at least 55% through the fourth quarter of 2018.

Operating expenses in the third quarter of 2018 were $2.9 million, up from $2.0 million in the same year-ago quarter. The increase was primarily due to additional expenses related to growth initiatives, including expanding the company’s team. However, operating expense as a percentage of revenue decreased to 54% as compared to 65% in the same year-ago quarter.

Net income for the third quarter of 2018 was $245,000 or $0.02 per share, as compared to a net loss of $623,000 or $(0.06) per share in the year-ago quarter. Profitability was primarily due to the increase in revenue and decrease in operating expense as a percentage of revenue. The company expects to continue to be profitable on a quarterly basis, although one-time expenses related to growth initiatives may result in quarterly fluctuations in profitability.

Cash and cash equivalents totaled $13.5 million at September 30, 2018, as compared to $12.0 million at June 30, 2018. The increase in cash was due to $9.0 million equity raise completed in May 2018. The company has continued to operate debt-free and expects to generate positive cashflow from operations for the remainder of 2018.

Management Commentary

“In Q3, we realized our eighth consecutive quarter of revenue growth and second consecutive quarter of profitability through adding new pharmaceutical brands, growing our digital health messaging revenue and expanding our distribution channels,” said OptimizeRx CEO, William Febbo.

“Our topline was up 75% from the year-ago quarter and up 6% sequentially, demonstrating how our low fixed-overhead model continues to support a highly-scalable financial opportunity. This was also evident in our expanding margins. In fact, at 58.1% for the quarter, we for the second time in a row surpassed our previously announced gross margin goal of 55%, and we plan to again exceed this goal in the current quarter.

“Today, our network reaches over half the nation's healthcare providers and the ambulatory market, making OptimizeRx the healthcare industry's largest point-of-care network. Through our digital platform, pharma companies can regain critical access to doctors and their patients and provide the information and savings they need and precisely when they need it, in the point of care, and create better health outcomes, a win-win-win.

“Subsequent to the quarter, our strategic acquisition of CareSpeak Communications allows us to complement and diversify our revenue streams while continuing to scale. There are immense resources being poured into quality improvement and value-based care, all for the simple reason that it improves outcomes and reduces costs for all stakeholders. By adding CareSpeak’s complementary capabilities to our platform, we extend our ability to engage doctors and patients, and improve health. CareSpeak allows us to further bridge the critical communication gaps between pharma, healthcare providers and patients.

“For the remainder of 2018, we plan to continue expanding our reach to physicians, pharmacies and patients, and bringing new solutions to our existing clients to capture more budget per pharmaceutical manufacturer. As we continue to demonstrate high ROI from the marketing spend of our pharma clients, we expect increased adoption of our digital health platform in cloud-based EHR channels, hospital systems and ultimately by potential clients.”

Conference Call

OptimizeRx management will host the presentation, followed by a question and answer period.

Date: Monday, November 5, 2018
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: 1-888-221-3881
International dial-in number: 1-323-794-2591
Conference ID: 1275447

Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact CMA at 1-949-432-7566.

A replay of the call will be available after 7:30 p.m. Eastern time on the same day through November 26, 2018, as well as available for replay via the Investors section of the OptimizeRx website at www.optimizerx.com.

Toll-free replay number: 1-844-512-2921
International replay number: 1-412-317-6671
Replay ID: 1275447

About OptimizeRx
OptimizeRx® (OPRX) is one of the nation’s leading providers of digital health messaging via electronic health records (EHRs), providing a direct channel for pharma companies to communicate with healthcare providers. The company’s cloud-based solution supports patient adherence to medications by providing real-time access to financial assistance, prior authorization, education, and critical clinical information. The company’s network is comprised of leading EHR platforms like Allscripts, Amazing Charts and Quest, and provides more than half of the ambulatory patient market with access to these benefits within their workflow at the point-of-care. For more information, follow the company on TwitterLinkedIn or visit www.optimizerx.com

Important Cautions Regarding Forward Looking Statements
This press release contains forward-looking statements within the definition of Section 27A of the Securities Act of 1933, as amended, and such as in section 21E of the Securities Act of 1934, as amended. These forward-looking statements should not be used to make an investment decision. The words 'estimate,' 'possible' and 'seeking' and similar expressions identify forward-looking statements, which speak only as to the date the statement was made. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted, or quantified. Future events and actual results could differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. The risks and uncertainties to which forward-looking statements are subject include, but are not limited to, the effect of government regulation, competition and other material risks.


OPTIMIZERx CORPORATION
 CONDENSED CONSOLIDATED BALANCE SHEETS

    September 30,
2018
    December 31,
2017
 
ASSETS     (unaudited)          
Current Assets                
Cash and cash equivalents   $ 13,523,002     $ 5,122,573  
Accounts receivable     3,791,964       2,257,276  
Accounts receivable – related party     1,373,054       1,173,614  
Prepaid expenses     201,320       255,428  
Total Current Assets     18,889,340       8,808,891  
Property and equipment, net     149,936       167,305  
Other Assets                
Patent rights, net     587,848       638,766  
Web development and other intangible costs, net     128,381       143,730  
Security deposit     5,049       5,049  
Total Other Assets     721,278       787,545  
TOTAL ASSETS   $ 19,760,554     $ 9,763,741  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
Current Liabilities                
Accounts payable – trade   $ 165,458     $ 457,289  
Accrued expenses     814,530       953,947  
Revenue share payable     763,084       1,177,136  
Revenue share payable – related party     -       447,670  
Deferred revenue     813,316       507,160  
Total Liabilities     2,556,388       3,543,202  
Stockholders' Equity                
Preferred stock, $0.001 par value, 10,000,000 shares authorized, no issued and outstanding at September 30, 2018 or December 31, 2017     -       -  
Common stock, $0.001 par value, 166,666,667 shares authorized, 11,970,976 and 9,772,694 shares issued and outstanding at Sept 30, 2018 and December 31, 2017, respectively     11,971       9,773  
Stock warrants     -       1,286,424  
Additional paid-in-capital     47,361,086       35,287,464  
Accumulated deficit     (30,168,891 )     (30,363,122 )
Total Stockholders' Equity     17,204,166       6,220,539  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 19,760,554     $ 9,763,741  
                 




OPTIMIZERx CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)  

    For the Three Months Ended
September 30
    For the Nine Months Ended
September 30
    2018     2017     2018     2017
NET REVENUE                      
Revenue $ 3,990,486   $ 2,076,736     $ 9,951,743   $ 5,729,275  
Revenue – Related Party   1,424,898     1,025,871       4,675,351     2,391,227  
TOTAL NET REVENUE   5,415,384     3,102,607       14,627,094     8,120,502  
REVENUE SHARE EXPENSE   2,268,968     1,703,676       6,513,810     4,690,943  
GROSS MARGIN   3,146,416     1,398,931       8,113,284     3,429,559  
OPERATING EXPENSES   2,923,238     2,028,589       7,807,705     5,320,220  
INCOME (LOSS) FROM OPERATIONS   223,178     (629,658 )     305,579     (1,890,661 )
                       
OTHER INCOME (EXPENSE)                      
Interest income   21,750     6,872       30,679     23,691  
Interest expense   -     -       -     -  
                       
TOTAL OTHER INCOME (EXPENSE)   21,750     6,872       30,679     23,691  
                       
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES   244,928     (622,786 )     336,258     (1,866,970 )
                       
PROVISION FOR INCOME TAXES   -     -       -     -  
NET INCOME (LOSS) $ 244,928   $ (622,786 )   $ 336,258   $ (1,866,970 )
                       
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                
BASIC   11,755,500     9,752,122       10,840,584     9,839,325  
DILUTED   12,921,768     9,752,122       11,766,754     9,839,325  
                       
NET INCOME (LOSS) PER SHARE                      
BASIC $ 0.02   $ (0.06 )   $ 0.03   $ (0.19 )
DILUTED $ 0.02   $ (0.06 )   $ 0.03   $ (0.19 )
                       

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)  

    For the Nine Months
Ended September 30
    2018   2017
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net income (loss) for the period   $ 336,258     $ (1,866,970 )
Adjustments to reconcile net income(loss) to net cash used in operating activities:                
Depreciation and amortization     163,418       212,918  
Stock and options issued for services     1,721,979       497,033  
Changes in:                
Accounts receivable     (1,734,128 )     355,644  
Prepaid expenses     54,108       (454,486 )
Accounts payable     (291,831 )     26,544  
Revenue share payable     (414,722 )     (744,526 )
Accrued expenses     (139,417 )     146,291  
Deferred revenue     164,129       342,511  
NET CASH USED IN OPERATING ACTIVITIES     (140,206 )     (1,485,041 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of property and equipment     (23,131 )     (29,310 )
Web development and other intangible costs     (56,651 )     (117,168 )
NET CASH USED IN INVESTING ACTIVITIES     (79,782 )     (146,478 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Net proceeds from issuance of common stock for cash     8,620,417       -  
Repurchase of common stock and stock payable     -       (390,000 )
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES     8,620,417       (390,000 )
NET CHANGE IN CASH AND CASH EQUIVALENTS     8,400,429       (2,021,519 )
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD     5,122,573       7,034,647  
CASH AND CASH EQUIVALENTS - END OF PERIOD   $ 13,523,002     $ 5,013,128  
                 
SUPPLEMENTAL CASH FLOW INFORMATION:                
Cash paid for interest   $     $  
Cash paid for income taxes   $     $  
Non-cash issuance of shares to WPP   $ 447,000     $  
                 

OptimizeRx Contact
Doug Baker, CFO
Tel (248) 651-6568 x807
dbaker@optimizerx.com 

Media Relations Contact
Nicole Brooks, Innsena Communications
(Tel) 860-800-2344
nicolebrooks@innsena.com

Investor Relations Contact
Ron Both, CMA
Tel (949) 432-7557
oprx@cma.team