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NantHealth Reports 2022 First Quarter Financial Results

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·10-min read
In this article:
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  • Q1 2022 Financial Highlights:

    • Total net revenue was $16.4 million

    • Gross margin was 56% of total revenue

  • Post Quarter End:

    • NaviNet Open Won MedTech Breakthrough "Healthcare Insurance Innovation Award." This is the second year in a row that a NantHealth product has been recognized for this award

MORRISVILLE, N.C., May 05, 2022--(BUSINESS WIRE)--NantHealth, Inc. (NASDAQ-GS: NH), a leading provider of enterprise solutions that help businesses transform complex data into actionable insights, today reported financial results for its first quarter ended March 31, 2022.

"We are pleased to start the year with positive momentum, with our 2022 first quarter revenue increasing over the previous quarter," said Ron Louks, Chief Operating Officer, NantHealth.

"To help drive further growth, we continue to invest in the development of our products and services, including the expansion of our cloud and data analytics capabilities. These investments are delivering results in multiple ways, including the launch of several new applications on our new cloud platform. Eviti Connect expansion continued with Autoimmune Diseases and our NantHealth Partner Portal which added on-demand customer access to interactive reporting. We are also seeing continued interest in our data enrichment services, as well as pilot programs for The OpenNMS Group Inc.’s cloud services."

Software and Services Q1 Highlights:

  • Clinical Decision Support (Eviti®):

    • Signed a multi-year renewal with a leading nonprofit, multi-state health plan serving government sponsored programs. The agreement significantly expands the scope of Eviti Connect for Oncology services provided to the plan, including the addition of full delegation services and evidence-based radiation oncology care

    • Expanded full delegation capabilities to include radiation oncology services in addition to medical oncology, enabling customers to assign prior authorization decisions to NantHealth

    • New functionality that allows health plan customers to approve and assign a prior authorization Eviti code to portions of a treatment plan, eliminating the need for complete plan resubmission and speeding up treatment to patients

  • Payer Engagement (NaviNet®):

    • Received HITRUST certification, a highly stringent benchmark that ensures NantHealth continues to meet key regulations and industry-defined security requirements. This places NantHealth and NaviNet Open in an elite group of organizations worldwide that have earned this status for information security

    • In May 2022, won the MedTech Breakthrough "Healthcare Insurance Innovation Award," recognized for the platform’s innovative ability to break through digital health and technology markets

    • Enhanced NaviNet Open Authorizations with new processes for automating the collection of additional procedure code modifiers and reducing the need for manual follow-up by the health plan

  • Network Monitoring and Management (The OpenNMS Group, Inc.):

    • Released OpenNMS Meridian 2022, the optimized and hardened version of the OpenNMS platform available to annual maintenance subscribers for use in production environments. Meridian 2022 features enhanced security, improved analytics for NetFlow processing, simplified Minion communication and enhanced geolocation with IP addresses

    • Signed several new professional services agreements with customers using the Horizon and Meridian versions of the OpenNMS platform. This work in collaboration with customers helps to improve the extensibility, reliability, and scalability of the platform for the entire user community

    • Completed global delivery of 1U hardware appliances, expanding the existing hardware appliance beta program with a large consumer electronics retailer

First Quarter Financial Results: 2022 vs 2021

For the 2022 first quarter:

  • Total net revenue was $16.4 million compared with $16.2 million.

  • Gross profit was $9.2 million, or 56% of total net revenue, compared with $9.1 million, or 56% of total net revenue.

  • Selling, general and administrative (SG&A) expenses increased to $15.0 million from $12.5 million.

  • Research and development (R&D) expenses increased to $5.7 million from $5.0 million.

  • Net loss from continuing operations, net of tax, was $16.0 million, or $0.14 per share, compared with $15.4 million, or $0.14 per share.

  • On a non-GAAP basis, net loss from continuing operations was $12.2 million, or $0.11 per share, compared with $9.6 million, or $0.09 per share.

  • At March 31, 2022, cash and cash equivalents totaled $16.1 million.

Conference Call Information and Forward-Looking Statements

Later today, the company will host a conference call at 1:30 p.m. PT (4:30 p.m. ET) to review its results of operations for the first quarter ended March 31, 2022. The conference call will be available to interested parties by dialing 800-920-5526 from the U.S. or Canada, or 212-231-2907 from international locations. The call will be broadcast via the Internet at www.nanthealth.com. Listeners are encouraged to visit the website at least 10 minutes prior to the start of the scheduled presentation to register, download and install any necessary audio software. A playback of the call will be archived and accessible on the same website for at least three months.

Discussion during the conference call may include forward-looking statements regarding topics such as the company’s financial status and performance, regulatory and operational developments, and other comments the company may make about its future plans or prospects in response to questions from participants on the conference call.

Use of Non-GAAP Financial Measures

This news release contains references to Non-GAAP financial measures, including adjusted net loss and adjusted net loss per share, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). The Company’s management believes that the presentation of Non-GAAP financial measures provides useful supplementary information regarding operational performance, because it enhances an investor’s overall understanding of the financial results for the Company’s core business. Additionally, it provides a basis for the comparison of the financial results for the Company’s core business between current, past and future periods. Other companies may define these measures in different ways. Non-GAAP financial measures should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. Non-GAAP per share numbers are calculated based on one class of common stock and do not incorporate the effects, if any, of using the two-class method.

About NantHealth, Inc.

NantHealth, a member of the NantWorks ecosystem of companies, provides enterprise solutions that help businesses transform complex data into actionable insights. By offering efficient ways to move, interpret and visualize complex and highly sensitive information, NantHealth enables customers in healthcare, life sciences, logistics, telecommunications and other industries to automate, understand and act on data while keeping it secure and scalable. NantHealth’s product portfolio comprises the latest technology in payer/provider collaboration platforms for real-time coverage decision support (Eviti and NaviNet), and data solutions that provide multi-data analysis, reporting and professional services offerings (Quadris). The OpenNMS Group, Inc., a NantHealth subsidiary, helps businesses monitor and manage network health and performance. For more information, visit nanthealth.com, follow us on Twitter, Facebook, LinkedIn and YouTube and subscribe to our blog.

This news release contains certain statements of a forward-looking nature relating to future events or future business performance. Forward-looking statements can be identified by the words "expects," "anticipates," "believes," "intends," "estimates," "plans," "will," "outlook" and similar expressions. Forward-looking statements are based on management’s current plans, estimates, assumptions and projections, and speak only as of the date they are made. Risks and uncertainties include, but are not limited to: our ability to successfully integrate a complex learning system to address a wide range of healthcare issues; our ability to successfully amass the requisite data to achieve maximum network effects; appropriately allocating financial and human resources across a broad array of product and service offerings; raising additional capital as necessary to fund our operations; our ability to grow the market for our software and data solutions; successfully enhancing our software and data solutions to achieve market acceptance and keep pace with technological developments; customer concentration; competition; security breaches; bandwidth limitations; our ability to integrate The OpenNMS Group, Inc. into our operations; our use and distribution of open source software; our ability to obtain necessary regulatory approvals, certifications and licenses; dependence upon senior management; the need to comply with and meet applicable laws and regulations; unexpected adverse events; and anticipated cost savings. We undertake no obligation to update any forward-looking statement in light of new information or future events, except as otherwise required by law. Forward-looking statements involve inherent risks and uncertainties, most of which are difficult to predict and are generally beyond our control. Actual results or outcomes may differ materially from those implied by the forward-looking statements as a result of the impact of a number of factors, many of which are discussed in more detail in our reports filed with the Securities and Exchange Commission.

NantHealth, Inc.

Consolidated Balance Sheets

(Dollars in thousands)

March 31,
2022

December 31,
2021

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$

16,078

$

29,084

Accounts receivable, net

5,025

5,810

Related party receivables, net

505

506

Prepaid expenses and other current assets

4,518

4,010

Total current assets

26,126

39,410

Property, plant, and equipment, net

11,956

12,366

Goodwill

98,333

98,333

Intangible assets, net

36,807

39,039

Related party receivable, net of current

1,012

1,012

Operating lease right-of-use assets

5,673

6,048

Other assets

1,494

1,620

Total assets

$

181,401

$

197,828

Liabilities and Stockholders' Equity

Current liabilities

Accounts payable

$

5,288

$

3,204

Accrued and other current liabilities

12,712

16,358

Deferred revenue

2,704

2,440

Related party payables, net

4,302

5,161

Notes payable

782

Total current liabilities

25,006

27,945

Deferred revenue, net of current

1,793

2,024

Related party liabilities

40,136

38,278

Related party promissory note

112,666

112,666

Related party convertible note, net

62,285

62,268

Convertible notes, net

74,623

74,603

Deferred income taxes, net

1,680

1,775

Operating lease liabilities

5,711

6,248

Other liabilities

34,098

34,013

Total liabilities

357,998

359,820

Stockholders' deficit

Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 115,550,244 and 115,505,244 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively

12

12

Additional paid-in capital

892,546

891,105

Accumulated deficit

(1,068,847

)

(1,052,897

)

Accumulated other comprehensive loss

(308

)

(212

)

Total stockholders' deficit

$

(176,597

)

$

(161,992

)

Total liabilities and stockholders' deficit

$

181,401

$

197,828

NantHealth, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended

March 31,

2022

2021

Revenue

Software-as-a-service related

$

15,771

$

15,757

Maintenance

464

383

Professional services

138

27

Total software-related revenue

16,373

16,167

Other

3

Total net revenue

16,373

16,170

Cost of Revenue

Software-as-a-service related

5,563

5,535

Maintenance

369

207

Professional services

7

Amortization of developed technologies

1,247

1,247

Total software-related cost of revenue

7,179

6,996

Other

47

Total cost of revenue

7,179

7,043

Gross Profit

9,194

9,127

Operating Expenses

Selling, general and administrative

14,980

12,502

Research and development

5,715

5,013

Amortization of acquisition-related assets

985

985

Total operating expenses

21,680

18,500

Loss from operations

(12,486

)

(9,373

)

Interest expense, net

(3,450

)

(3,568

)

Other income (expense), net

6

(2,570

)

Loss from continuing operations before income taxes

(15,930

)

(15,511

)

Provision for (benefit from) income taxes

20

(8

)

Net loss from continuing operations

(15,950

)

(15,503

)

Income from discontinued operations, net of tax attributable to NantHealth

4

Net loss

(15,950

)

(15,499

)

Net loss attributable to noncontrolling interests

(91

)

Net loss attributable to NantHealth

$

(15,950

)

$

(15,408

)

Basic and diluted net loss per share attributable to NantHealth:

Total net loss per share - common stock

$

(0.14

)

$

(0.14

)

Weighted average shares outstanding

Basic and diluted - common stock

115,521,243

111,319,061

NantHealth, Inc.

Non-GAAP Net Loss from Continuing Operations Attributable to NantHealth and

Non-GAAP Net Loss Per Share from Continuing Operations Attributable to NantHealth

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended

March 31,

2022

2021

Net loss from continuing operations attributable to NantHealth

$

(15,950

)

$

(15,412

)

Adjustments to GAAP net loss from continuing operations attributable to NantHealth:

Stock-based compensation expense from continuing operations

1,390

883

Change in fair value of derivatives liability

(4

)

Change in fair value of Bookings Commitment

94

2,463

Noncash interest expense related to convertible notes

37

323

Intangible amortization from continuing operations

2,232

2,212

Tax (benefit) provision resulting from certain noncash tax items

(40

)

(43

)

Total adjustments to GAAP net loss from continuing operations attributable to NantHealth

3,713

5,834

Net loss from continuing operations attributable to NantHealth - Non-GAAP

$

(12,237

)

$

(9,578

)

Weighted average basis common shares outstanding

115,521,243

111,319,061

Net loss per common share from continuing operations attributable to NantHealth - Non-GAAP

$

(0.11

)

$

(0.09

)

Reconciliation of Net Loss per Common Share from Continuing Operations Attributable to NantHealth

to Net Loss per Common Share from Continuing Operations Attributable to NantHealth - Non-GAAP

(Unaudited)

Three Months Ended

March 31,

2022

2021

Net loss per common share from continuing operations attributable to NantHealth

$

(0.14

)

$

(0.14

)

Adjustments to GAAP net loss per common share from continuing operations attributable to NantHealth:

Stock-based compensation expense from continuing operations

0.01

0.01

Change in fair value of derivatives liability

Change in fair value of Bookings Commitment

0.02

Noncash interest expense related to convertible notes

Intangible amortization from continuing operations

0.02

0.02

Tax (benefit) provision resulting from certain noncash tax items

Total adjustments to GAAP net loss per common share from continuing operations attributable to NantHealth

0.03

0.05

Net loss per common share from continuing operations attributable to NantHealth - Non-GAAP

$

(0.11

)

$

(0.09

)

View source version on businesswire.com: https://www.businesswire.com/news/home/20220505006002/en/

Contacts

Investor Contact:
Robert Jaffe
rjaffe@rjaffeco.com
424.288.4098

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