Recent Operational Highlights:
- Opened our 70th clinic and added 5 physicians bringing our total provider count to 112
- We are live on Ambience, a tool that utilizes AI technology to further maximize productivity, drive optimal charge capture, and allow for more capacity
Welcomed Jeremy Castle as our new Chief Operating Officer- Signed full-risk capitated contract in
South Florida , effectiveJanuary 1, 2024
Third Quarter 2023 Financial Highlights
- Consolidated revenue of
$82 million , an increase of 26% compared to the prior year quarter - Gross profit of
$16 million , an increase of 23% compared to the prior year quarter, and gross margin of 19.5%, a decrease from 20.0% the prior year quarter - Net loss of
$17.4 million compared to net loss of$2.7 million for the prior year quarter - Basic and diluted (loss) earnings per share of
$(0.19) and$(0.19) , respectively, compared to$(0.03) and$(0.17) , respectively, for the prior year quarter - Adjusted EBITDA of
$(5.3) million compared to$(6.7) million for the prior year quarter - Cash, cash equivalents, and investments of
$87.4 million as ofSeptember 30, 2023
Management Commentary
Reaffirmed Outlook for Fiscal Year 2023
TOI uses Adjusted EBITDA, a non-GAAP metric, as an additional tool to assess its operational performance. See "Financial Information: Non-GAAP Financial Measures" below. In reliance on the unreasonable efforts exception for forward-looking information provided under Regulation S-K, TOI is not reasonably able to provide a quantitative reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable GAAP financial measure, without unreasonable efforts due to uncertainties regarding taxes, share-based compensation, goodwill impairment charges, change in fair value of liabilities, unrealized (gains) losses on investments, practice acquisition-related costs, consulting and legal fees, transaction costs and other non-cash items. The variability of these items could have an unpredictable, and potentially significant, impact on TOI’s future GAAP financial results. TOI expects interest expense in the range of
2023 Guidance - Reaffirmed | |
Revenue | |
Gross Profit | |
Adjusted EBITDA | |
Value-based lives(1) | 1.75 million to 2.0 million lives |
(1) Represents lives under capitation contracts.
TOI's achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in its filings with the
Third Quarter 2023 Results (for the three months ended
Consolidated revenue for Q3 2023 was
Revenue for patient services was
Gross profit in Q3 2023 was
Selling, general and administrative ("SG&A") expenses in Q3 2023 were
Net loss for Q3 2023 was
Year to Date 2023 Results (for the nine months ended
Consolidated revenue for the nine months ended 2023 was
Revenue for patient services the nine months ended 2023 was
Gross profit in the nine months ended 2023 was
SG&A expenses in the nine months ended 2023 were
Net loss for the nine months ended 2023 was
Webcast and Conference Call
TOI will host a conference call and webcast on
The conference call can be accessed live over the phone by dialing 1-877-407-0789, or for international callers, 1-201-689-8562. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 13739395. The replay will be available until
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of TOI's website at https://investors.theoncologyinstitute.com.
About The
Founded in 2007, TOI is advancing oncology by delivering highly specialized, value-based cancer care in the community setting. TOI offers cutting-edge, evidence-based cancer care to a population of approximately 1.8 million patients including clinical trials, transfusions, and other services traditionally associated with the most advanced care delivery organizations. With 100+ employed clinicians and more than 700 teammates in over 70 clinic locations and growing, TOI is changing oncology for the better. For more information visit www.theoncologyinstitute.com.
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “preliminary,” “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “predict,” “potential,” “guidance,” “approximately,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding projections, anticipated financial results, estimates and forecasts of revenue and other financial and performance metrics and projections of market opportunity and expectations. These statements are based on various assumptions and on the current expectations of TOI and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by anyone as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of TOI. These forward-looking statements are subject to a number of risks and uncertainties, including the accuracy of the assumptions underlying the 2023 outlook discussed herein, the outcome of judicial and administrative proceedings to which TOI may become a party or governmental investigations to which TOI may become subject that could interrupt or limit TOI’s operations, result in adverse judgments, settlements or fines and create negative publicity; changes in TOI’s clients’ preferences, prospects and the competitive conditions prevailing in the healthcare sector; failure to continue to meet, or to cure any deficiency with respect to, stock exchange listing standards; the impact of COVID-19 on TOI’s business; those factors discussed in the documents of TOI filed, or to be filed, with the
Financial Information; Non-GAAP Financial Measures
Some of the financial information and data contained in this press release, such as Adjusted EBITDA, have not been prepared in accordance with
TOI defines Adjusted EBITDA as net (loss) income plus depreciation, amortization, net interest expense, income taxes, non-cash addbacks, share-based compensation, goodwill impairment charges, changes in fair value of liabilities, unrealized gains or losses on investments and other adjustments to add-back the following: consulting and legal fees related to acquisitions, deferred consideration payment for practice acquisition, one-time consulting and legal fees related to certain advisory projects, software implementations and debt or equity financings, severance expense and temporary labor and recruiting charges to build out our corporate infrastructure. A reconciliation of Adjusted EBITDA to net (loss) income, the most comparable GAAP metric, is set forth below.
Adjusted EBITDA Reconciliation | |||||||||||||||
Three Months Ended | Change | ||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||
Net loss | $ | (17,419 | ) | $ | (2,674 | ) | $ | (14,745 | ) | 551.4 | % | ||||
Depreciation and amortization | $ | 1,698 | $ | 1,134 | $ | 564 | 49.7 | % | |||||||
Interest expense, net | $ | 1,755 | $ | 1,498 | $ | 257 | 17.2 | % | |||||||
Income tax expense (benefit) | $ | 135 | $ | (25 | ) | $ | 160 | (640.0 | )% | ||||||
Non-cash addbacks(1) | $ | (14 | ) | $ | 299 | $ | (313 | ) | (104.7 | )% | |||||
Share-based compensation | $ | 4,657 | $ | 6,546 | $ | (1,889 | ) | (28.9 | )% | ||||||
Changes in fair value of liabilities | $ | 1,464 | $ | (18,932 | ) | $ | 20,396 | (107.7 | )% | ||||||
Unrealized (gains) losses on investments | $ | (157 | ) | $ | 33 | $ | (190 | ) | (575.8 | )% | |||||
Practice acquisition-related costs(2) | $ | 41 | $ | 166 | $ | (125 | ) | (75.3 | )% | ||||||
Post-combination compensation expense(3) | $ | 399 | $ | 2,088 | $ | (1,689 | ) | (80.9 | )% | ||||||
Consulting and legal fees(4) | $ | 1 | $ | 883 | $ | (882 | ) | (99.9 | )% | ||||||
Infrastructure and workforce costs(5) | $ | 1,978 | $ | 1,239 | $ | 739 | 59.6 | % | |||||||
Transaction costs(6) | $ | 112 | $ | 1,001 | $ | (889 | ) | (88.8 | )% | ||||||
Adjusted EBITDA | $ | (5,350 | ) | $ | (6,744 | ) | $ | 1,394 | (20.7 | )% |
(1) During the three months ended
(2) Practice acquisition-related costs were comprised of consulting and legal fees incurred to perform due diligence, execute, and integrate acquisitions of various oncology practices.
(3) Deferred consideration payments for practice acquisitions that are contingent upon the seller’s future employment at the Company.
(4) Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees, and related to certain advisory projects during the three months ended
(5) Infrastructure and workforce costs were comprised of recruiting expenses to build out corporate infrastructure of
(6) Transaction costs incurred during the three months ended
Nine Months Ended | Change | ||||||||||||||
(dollars in thousands) | 2023 | 2022 | $ | % | |||||||||||
Net (loss) income | $ | (64,314 | ) | $ | 11,159 | $ | (75,473 | ) | (676.3 | )% | |||||
Depreciation and amortization | $ | 4,296 | $ | 3,219 | $ | 1,077 | 33.5 | % | |||||||
Interest expense, net | $ | 4,836 | $ | 1,633 | $ | 3,203 | 196.1 | % | |||||||
Income tax expense | $ | 278 | $ | 124 | $ | 154 | 124.2 | % | |||||||
Non-cash addbacks(1) | $ | 153 | $ | 604 | $ | (451 | ) | (74.7 | )% | ||||||
Share-based compensation | $ | 13,731 | $ | 21,612 | $ | (7,881 | ) | (36.5 | )% | ||||||
$ | 16,867 | $ | — | $ | 16,867 | N/A | |||||||||
Changes in fair value of liabilities | $ | (2,884 | ) | $ | (69,776 | ) | $ | 66,892 | (95.9 | )% | |||||
Unrealized (gains) losses on investments | $ | (31 | ) | $ | 33 | $ | (64 | ) | (193.9 | )% | |||||
Practice acquisition-related costs(2) | $ | 112 | $ | 699 | $ | (587 | ) | (84.0 | )% | ||||||
Post-combination compensation expense(3) | $ | 1,562 | $ | 2,088 | $ | (526 | ) | (25.2 | )% | ||||||
Consulting and legal fees(4) | $ | 1,515 | $ | 2,682 | $ | (1,167 | ) | (43.5 | )% | ||||||
Infrastructure and workforce costs(5) | $ | 4,181 | $ | 3,826 | $ | 355 | 9.3 | % | |||||||
Transaction costs(6) | $ | 140 | $ | 3,195 | $ | (3,055 | ) | (95.6 | )% | ||||||
Adjusted EBITDA | $ | (19,558 | ) | $ | (18,902 | ) | $ | (656 | ) | 3.5 | % |
(1) During the nine months ended
(2) Practice acquisition-related costs were comprised of consulting and legal fees incurred to perform due diligence, execute, and integrate acquisitions of various oncology practices.
(3) Deferred consideration payments for practice acquisitions that are contingent upon the seller’s future employment at the Company.
(4) Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees, and related to certain advisory projects during the nine months ended
(5) Infrastructure and workforce costs were comprised primarily of recruiting expenses to build out corporate infrastructure of
(6) Transaction costs incurred during the nine months ended
Key Business Metrics | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Clinics(1) | 84 | 74 | 84 | 74 | |||||||||||
Markets | 15 | 14 | 15 | 14 | |||||||||||
Lives under value-based contracts (millions) | 1.8 | 1.7 | 1.8 | 1.7 | |||||||||||
Net (loss) income | $ | (17,419 | ) | $ | (2,674 | ) | $ | (64,314 | ) | $ | 11,159 | ||||
Adjusted EBITDA (in thousands)(2) | $ | (5,350 | ) | $ | (6,744 | ) | $ | (19,558 | ) | $ | (18,902 | ) |
(1) Includes independent oncology practices to which we provide limited management services, but do not bear the operating costs.
(2) Adjusted EBITDA is a "non-GAAP" financial measure within the meaning of Item 10 of Regulation S-K promulgated by the
- Depreciation and amortization,
- Interest expense, net,
- Income tax expense,
- Non-cash addbacks,
- Share-based compensation,
Goodwill impairment charges- Changes in fair value of liabilities,
- Unrealized (gains) losses on investments
- Practice acquisition-related costs,
- Post combination compensation expense,
- Consulting and legal fees,
- Infrastructure and workforce costs, and
- Transaction costs.
The Company includes Adjusted EBITDA because it is an important measure which our management uses to assess the results of operations, to evaluate factors and trends affecting the business, and to plan and forecast future periods.
Management believes that this measure provides an additional way of viewing aspects of the Company's operations that, when viewed with the GAAP results, provides a more complete understanding of the Company's results of operations and the factors and trends affecting the business. However, non-GAAP financial measures should be considered a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with
Consolidated Balance Sheets (Unaudited)
(in thousands except share data)
Assets | ||||||||
Current assets: | ||||||||
Cash and restricted cash | $ | 27,535 | $ | 14,010 | ||||
Current marketable securities | 59,877 | 59,796 | ||||||
Accounts receivable, net | 48,442 | 39,816 | ||||||
Other receivables | 464 | 617 | ||||||
Inventories, net | 12,174 | 9,261 | ||||||
Prepaid expenses | 4,190 | 6,918 | ||||||
Total current assets | 152,682 | 130,418 | ||||||
Noncurrent marketable securities | — | 58,354 | ||||||
Property and equipment, net | 10,787 | 8,547 | ||||||
Operating right of use assets | 28,533 | 24,494 | ||||||
Intangible assets, net | 18,561 | 17,957 | ||||||
7,230 | 21,418 | |||||||
Other assets | 560 | 477 | ||||||
Total assets | $ | 218,353 | $ | 261,665 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 13,333 | $ | 9,372 | ||||
Current portion of operating lease liabilities | 6,079 | 5,498 | ||||||
Income taxes payable | 255 | 255 | ||||||
Accrued expenses and other current liabilities | 12,723 | 14,595 | ||||||
Total current liabilities | 32,390 | 29,720 | ||||||
Operating lease liabilities | 26,014 | 22,060 | ||||||
Derivative warrant liabilities | 292 | 350 | ||||||
Derivative earnout liabilities | 11 | 803 | ||||||
Conversion option derivative liabilities | 1,926 | 3,960 | ||||||
Long-term debt, net of unamortized debt issuance costs | 85,254 | 80,621 | ||||||
Other non-current liabilities | 459 | 868 | ||||||
Deferred income taxes liability | 158 | 108 | ||||||
Total liabilities | 146,504 | 138,490 | ||||||
Stockholders’ equity: | ||||||||
Common Stock, | 8 | 7 | ||||||
Series A Convertible Preferred Stock, | — | — | ||||||
Additional paid-in capital | 200,256 | 186,250 | ||||||
Treasury Stock at cost, 1,733,774 and 0 shares at | (1,019 | ) | — | |||||
Accumulated deficit | (127,396 | ) | (63,082 | ) | ||||
Total stockholders’ equity | 71,849 | 123,175 | ||||||
Total liabilities and stockholders’ equity | $ | 218,353 | $ | 261,665 | ||||
Consolidated Statements of Operations (Unaudited)
(in thousands except share data)
Three Months Ended | Nine Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Revenue | |||||||||||||||
Patient services | $ | 53,634 | $ | 44,627 | $ | 157,333 | $ | 118,793 | |||||||
Dispensary | 26,792 | 18,839 | 76,228 | 57,736 | |||||||||||
Clinical trials & other | 1,609 | 1,511 | 4,890 | 4,530 | |||||||||||
Total operating revenue | 82,035 | 64,977 | 238,451 | 181,059 | |||||||||||
Operating expenses | |||||||||||||||
Direct costs – patient services | 44,961 | 36,126 | 132,653 | 96,379 | |||||||||||
Direct costs – dispensary | 21,072 | 15,738 | 60,328 | 47,816 | |||||||||||
Direct costs – clinical trials & other | 24 | 113 | 276 | 400 | |||||||||||
— | — | 16,867 | — | ||||||||||||
Selling, general and administrative expense | 28,205 | 31,963 | 85,761 | 90,117 | |||||||||||
Depreciation and amortization | 1,698 | 1,134 | 4,296 | 3,219 | |||||||||||
Total operating expenses | 95,960 | 85,074 | 300,181 | 237,931 | |||||||||||
Loss from operations | (13,925 | ) | (20,097 | ) | (61,730 | ) | (56,872 | ) | |||||||
Other non-operating expense (income) | |||||||||||||||
Interest expense | 2,695 | 1,497 | 8,017 | 1,632 | |||||||||||
Interest income | (940 | ) | — | (3,181 | ) | — | |||||||||
Change in fair value of derivative warrant liabilities | 203 | 159 | (58 | ) | (445 | ) | |||||||||
Change in fair value of earnout liabilities | (23 | ) | (3,581 | ) | (792 | ) | (53,821 | ) | |||||||
Change in fair value of conversion option derivative liabilities | 1,284 | (15,510 | ) | (2,034 | ) | (15,510 | ) | ||||||||
Gain on debt extinguishment | — | — | — | (183 | ) | ||||||||||
Other, net | 140 | 36 | 354 | 172 | |||||||||||
Total other non-operating income (loss) | 3,359 | (17,399 | ) | 2,306 | (68,155 | ) | |||||||||
(Loss) income before provision for income taxes | (17,284 | ) | (2,698 | ) | (64,036 | ) | 11,283 | ||||||||
Income tax (expense) benefit | (135 | ) | 24 | (278 | ) | (124 | ) | ||||||||
Net (loss) income | $ | (17,419 | ) | $ | (2,674 | ) | $ | (64,314 | ) | $ | 11,159 | ||||
Net (loss) income per share attributable to common stockholders: | |||||||||||||||
Basic | $ | (0.19 | ) | $ | (0.03 | ) | $ | (0.71 | ) | $ | 0.12 | ||||
Diluted | $ | (0.19 | ) | $ | (0.17 | ) | $ | (0.71 | ) | $ | (0.03 | ) | |||
Weighted-average number of shares outstanding: | |||||||||||||||
Basic | 73,469,101 | 72,184,366 | 73,679,454 | 72,807,277 | |||||||||||
Diluted | 73,469,101 | 79,581,304 | 73,679,454 | 75,300,018 |
Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended | |||||||
2023 | 2022 | ||||||
Cash flows from operating activities: | |||||||
Net (loss) income | $ | (64,314 | ) | $ | 11,159 | ||
Adjustments to reconcile net (loss) income to cash and cash equivalents used in operating activities: | |||||||
Depreciation and amortization | 4,296 | 3,219 | |||||
Amortization of debt issuance costs and debt discount | 4,633 | 892 | |||||
16,867 | — | ||||||
Share-based compensation | 13,731 | 21,613 | |||||
Change in fair value of liability classified warrants | (58 | ) | (445 | ) | |||
Change in fair value of liability classified earnouts | (792 | ) | (53,821 | ) | |||
Change in fair value of liability classified conversion option derivatives | (2,034 | ) | (15,510 | ) | |||
Realized loss on sale of investments | 11 | — | |||||
Unrealized (gain) loss on investments | (44 | ) | 62 | ||||
Accretion of discount on investment securities | (712 | ) | (29 | ) | |||
Deferred taxes | 50 | 183 | |||||
Gain on loan forgiveness | — | (183 | ) | ||||
Credit losses | 31 | 402 | |||||
Loss on disposal of property and equipment | — | 22 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (8,657 | ) | (15,215 | ) | |||
Inventories | (2,913 | ) | (2,584 | ) | |||
Other receivables | 153 | 678 | |||||
Prepaid expenses | 2,728 | 3,545 | |||||
Operating lease right-of-use assets | 4,448 | 3,720 | |||||
Other assets | (83 | ) | (141 | ) | |||
Accrued expenses and other current liabilities | 579 | 2,894 | |||||
Income taxes payable | — | 255 | |||||
Accounts payable | 3,961 | (4,404 | ) | ||||
Current and long-term operating lease liabilities | (3,909 | ) | (2,998 | ) | |||
Other non-current liabilities | (394 | ) | (1,073 | ) | |||
Net cash and cash equivalents used in operating activities | (32,436 | ) | (47,759 | ) | |||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (3,706 | ) | (3,534 | ) | |||
Cash paid for practice acquisitions | (4,300 | ) | (8,107 | ) | |||
Purchases of marketable securities/investments | (9,683 | ) | (87,402 | ) | |||
Sales of marketable securities/investments | 68,702 | — | |||||
Net cash and cash equivalents provided by (used in) investing activities | 51,027 | (99,043 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from issuance of long-term debt | — | 110,000 | |||||
Transactions costs related to issuance of long-term debt | — | (3,663 | ) | ||||
Payments made for financing of insurance payments | (3,010 | ) | (3,739 | ) | |||
Payment of deferred consideration liability for acquisition | (959 | ) | (509 | ) | |||
Principal payments on financing leases | (91 | ) | (39 | ) | |||
Common stock repurchase | (1,019 | ) | (9,000 | ) | |||
Common stock issued for options exercised | 13 | 416 | |||||
Taxes for common stock net settled | — | (413 | ) | ||||
Net cash and cash equivalents provided by (used in) financing activities | (5,066 | ) | 93,053 | ||||
Net increase (decrease) in cash and cash equivalents | 13,525 | (53,749 | ) | ||||
Cash and cash equivalents at beginning of period | 14,010 | 115,174 | |||||
Cash and cash equivalents at end of period | $ | 27,535 | $ | 61,425 |
Contacts
Media
The
danielvirnich@theoncologyinstitute.com
(562) 735-3226 x 81125
Revive
mpetrone@reviveagency.com
(615) 760-4542
Investors
investors@theoncologyinstitute.com
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