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Press release content from Business Wire. The AP news staff was not involved in its creation.

NantHealth Reports 2021 Third Quarter Financial Results

November 4, 2021 GMT

MORRISVILLE, N.C.--(BUSINESS WIRE)--Nov 4, 2021--

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 third quarter ended September 30, 2021.

“Expansion of our Eviti Connect decision support solution to additional diseases states (beyond oncology) has been a major focus for us this year,” said Ron Louks, Chief Operating Officer, NantHealth. “With that in mind, I am pleased to report that, during the third quarter, we signed and are preparing to launch the very first Eviti Connect autoimmune disease program with a key customer and interest in this new offering is strong. This was a significant accomplishment and, when coupled with investments we are making in our network monitoring and management service suite (OpenNMS®) and data capabilities (Quadris™), we believe these advancements lay the foundation for substantial new growth opportunities for our business.

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“On the financial front, net revenue for the 2021 third quarter was lower than the previous quarter, primarily due to timing differences between the expiration of certain contracts and the initiation of others. For the 2021 fourth quarter, we expect net revenue to return closer to our average run rate for this year.

“Also, as announced today in a dedicated press release, we added three senior executives to head our sales, strategy and human resource functions. All are accomplished and experienced leaders, and we look forward to the benefit of their insights as we begin the next stage of our growth.”

Software and Services Highlights:

  • Clinical Decision Support (Eviti®):
    • Continued expansion of services provided through a key Eviti channel partner, with the addition of two new health plans and expect further growth in the fourth quarter with the addition of a large, multi-state customer-owned health insurer
    • Signed agreement with Care Continuity, Inc., a leader in network integrity and care navigation, to partner on product offerings that improve care logistics management for complex, high risk and chronic diseases, with an initial focus on extending care pathways for Eviti Connect customers and their members (with NaviNet care pathway opportunities to follow)
    • Dr. Tiffany Avery, NantHealth Chief Medical Officer, was selected to present continuing education session on advancing equity in cancer care at the Oncology Clinical Pathways Congress. The virtual session took place October 1
    • Launched Eviti Connect 8.6, which includes more robust savings and ROI visualizations for payer customers via expanded reporting that is enabled by our Quadris data analytics capabilities

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  • Payer Engagement (NaviNet® and Population Health Management):
    • In October, signed a multi-year agreement with a new third party administrator that will use NaviNet Open to enhance the services it provides to self-insured health plan customers
    • Signed three-year renewal with a long-term partner and leading provider of drug authorizations, enabling electronic submission of prior authorization for any drug under any plan, including Medicare and Medicaid
    • Established a collaboration with Intraprise Systems to bring HIPAA One compliance management solutions to the NaviNet provider network, helping providers meet HIPAA compliance requirements and protect patient data
    • Launched the new NantHealth Help Center, an innovative platform that provides users with easy access to help and training content, online channels to contact support, and tools to view in progress and resolved support requests
    • Introduced new Authorization Submission APIs that allow providers to automate and streamline prior authorization requests to connected NaviNet payer customers

  • Network Monitoring and Management (The OpenNMS Group, Inc.):
    • Renewed agreements with 12 key customers and expanded services with one of the nation’s largest telecom providers (an existing account), reaffirming the value OpenNMS provides its customers
    • Continued development and preparation for fourth quarter launch of zero-touch appliances, simplifying the deployment of distributed monitoring capabilities at scale

Business and Financial Highlights

For the 2021 third quarter:

  • Total net revenue was $14.4 million compared with $18.8 million in Q3 of 2020.
  • Gross profit was $7.5 million, or 52% of total net revenue, compared with $11.2 million, or 60% of total net revenue, for the prior-year period.
  • Selling, general and administrative (SG&A) expenses increased to $13.0 million from $12.4 million in the 2020 third quarter.
  • Research and development (R&D) expenses decreased to $4.6 million from $4.7 million.
  • Net loss from continuing operations, net of tax, was $10.8 million, or $0.09 per share, compared with $11.0 million, or $0.10 per share, in the 2020 third quarter.
  • Non-GAAP net loss from continuing operations was $11.5 million, or $0.10 per share, compared with $7.2 million, or $0.07 per share, for the third quarter of 2020.
  • At September 30, 2021, cash and cash equivalents totaled $45.5 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 third quarter ended September 30, 2021. The conference call will be available to interested parties by dialing 800-584-1507 from the U.S. or Canada, or 212-231-2902 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)

 

September 30,
2021

 

December 31,
2020

 

(Unaudited)

 

 

Assets

 

 

 

Current assets

 

 

 

Cash and cash equivalents

$

45,513

 

 

 

$

22,787

 

 

Accounts receivable, net

4,504

 

 

 

3,273

 

 

Related party receivables, net

1,516

 

 

 

1,031

 

 

Prepaid expenses and other current assets

5,262

 

 

 

3,504

 

 

Total current assets

56,795

 

 

 

30,595

 

 

Property, plant, and equipment, net

12,875

 

 

 

13,102

 

 

Goodwill

98,333

 

 

 

98,333

 

 

Intangible assets, net

41,272

 

 

 

47,969

 

 

Related party receivable, net of current

 

 

 

823

 

 

Operating lease right-of-use assets

6,497

 

 

 

7,539

 

 

Other assets

1,596

 

 

 

1,927

 

 

Total assets

$

217,368

 

 

 

$

200,288

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities

 

 

 

Accounts payable

$

2,069

 

 

 

$

5,122

 

 

Accrued and other current liabilities

14,380

 

 

 

13,975

 

 

Deferred revenue

1,938

 

 

 

1,166

 

 

Related party payables, net

5,136

 

 

 

4,238

 

 

Notes payable

1,557

 

 

 

268

 

 

Related party convertible note, net

4,995

 

 

 

9,411

 

 

Convertible notes, net

4,488

 

 

 

90,578

 

 

Total current liabilities

34,563

 

 

 

124,758

 

 

Deferred revenue, net of current

1,682

 

 

 

393

 

 

Related party liabilities

36,465

 

 

 

31,091

 

 

Related party promissory note

112,666

 

 

 

112,666

 

 

Related party convertible note, net

62,251

 

 

 

 

 

Convertible notes, net

74,583

 

 

 

 

 

Deferred income taxes, net

1,673

 

 

 

1,853

 

 

Operating lease liabilities

6,878

 

 

 

8,170

 

 

Other liabilities

33,398

 

 

 

32,757

 

 

Total liabilities

364,159

 

 

 

311,688

 

 

Commitments and Contingencies (Note 14)

 

 

 

 

 

 

 

Stockholders' deficit

 

 

 

Common stock, $0.0001 par value per share, 750,000,000 shares authorized; 115,307,744 and 111,284,733 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

12

 

 

 

11

 

 

Additional paid-in capital

889,620

 

 

 

891,583

 

 

Accumulated deficit

(1,036,192

)

 

 

(1,003,210

)

 

Accumulated other comprehensive loss

(231

)

 

 

(168

)

 

Total NantHealth stockholders' deficit

(146,791

)

 

 

(111,784

)

 

Noncontrolling interests

 

 

 

384

 

 

Total stockholders' deficit

(146,791

)

 

 

(111,400

)

 

Total liabilities and stockholders' deficit

$

217,368

 

 

 

$

200,288

 

 

NantHealth, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except per share amounts)

(Unaudited)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

Software-as-a-service related

$

13,879

 

 

 

$

18,355

 

 

 

$

45,140

 

 

 

$

53,997

 

 

Maintenance

406

 

 

 

299

 

 

 

1,201

 

 

 

299

 

 

Professional services

57

 

 

 

62

 

 

 

257

 

 

 

62

 

 

Total software-related revenue

14,342

 

 

 

18,716

 

 

 

46,598

 

 

 

54,358

 

 

Other

17

 

 

 

49

 

 

 

20

 

 

 

172

 

 

Total net revenue

14,359

 

 

 

18,765

 

 

 

46,618

 

 

 

54,530

 

 

 

 

 

 

 

 

 

 

Cost of Revenue:

 

 

 

 

 

 

 

Software-as-a-service related

5,244

 

 

 

5,935

 

 

 

16,223

 

 

 

17,552

 

 

Maintenance

298

 

 

 

131

 

 

 

775

 

 

 

131

 

 

Professional services

6

 

 

 

15

 

 

 

13

 

 

 

15

 

 

Amortization of developed technologies

1,247

 

 

 

1,222

 

 

 

3,741

 

 

 

3,508

 

 

Total software-related cost of revenue

6,795

 

 

 

7,303

 

 

 

20,752

 

 

 

21,206

 

 

Other

34

 

 

 

216

 

 

 

127

 

 

 

827

 

 

Total cost of revenue

6,829

 

 

 

7,519

 

 

 

20,879

 

 

 

22,033

 

 

 

 

 

 

 

 

 

 

Gross Profit

7,530

 

 

 

11,246

 

 

 

25,739

 

 

 

32,497

 

 

 

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

 

Selling, general and administrative

12,969

 

 

 

12,442

 

 

 

37,309

 

 

 

36,864

 

 

Research and development

4,648

 

 

 

4,681

 

 

 

14,510

 

 

 

12,446

 

 

Amortization of acquisition-related assets

985

 

 

 

958

 

 

 

2,956

 

 

 

2,691

 

 

Total operating expenses

18,602

 

 

 

18,081

 

 

 

54,775

 

 

 

52,001

 

 

 

 

 

 

 

 

 

 

Loss from operations

(11,072

)

 

 

(6,835

)

 

 

(29,036

)

 

 

(19,504

)

 

Interest expense, net

(3,572

)

 

 

(4,861

)

 

 

(10,943

)

 

 

(14,291

)

 

Other income (expense), net

3,759

 

 

 

747

 

 

 

(1,862

)

 

 

(2,550

)

 

Loss from related party equity method investment

 

 

 

 

 

 

 

 

 

(31,702

)

 

Loss from continuing operations before income taxes

(10,885

)

 

 

(10,949

)

 

 

(41,841

)

 

 

(68,047

)

 

Provision for income taxes

23

 

 

 

77

 

 

 

21

 

 

 

174

 

 

Net loss from continuing operations

(10,908

)

 

 

(11,026

)

 

 

(41,862

)

 

 

(68,221

)

 

Income (loss) from discontinued operations, net of tax attributable to NantHealth

 

 

 

(16

)

 

 

24

 

 

 

31,955

 

 

Net loss

(10,908

)

 

 

(11,042

)

 

 

(41,838

)

 

 

(36,266

)

 

Net loss attributable to non-controlling interests

(65

)

 

 

(42

)

 

 

(284

)

 

 

(42

)

 

Net loss attributable to NantHealth

$

(10,843

)

 

 

$

(11,000

)

 

 

$

(41,554

)

 

 

$

(36,224

)

 

 

 

 

 

 

 

 

 

Basic and diluted net (loss) income per share attributable to NantHealth:

 

 

 

 

 

 

 

Continuing operations - common stock

$

(0.09

)

 

 

$

(0.10

)

 

 

$

(0.37

)

 

 

$

(0.62

)

 

Discontinued operations - common stock

$

 

 

 

$

 

 

 

$

 

 

 

$

0.29

 

 

Total net loss per share - common stock

$

(0.09

)

 

 

$

(0.10

)

 

 

$

(0.37

)

 

 

$

(0.33

)

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

Basic and diluted - common stock

115,243,671

 

 

 

110,929,357

 

 

 

113,706,124

 

 

 

110,859,611

 

 

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
September 30,

 

Nine Months Ended
September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss from continuing operations attributable to NantHealth

$

(10,843

)

 

 

$

(10,984

)

 

 

$

(41,578

)

 

 

$

(68,179

)

 

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

 

 

 

 

 

 

 

Loss on Exchange and Prepayment of 2016 Notes

 

 

 

 

 

 

742

 

 

 

 

 

Loss from related party equity method investment

 

 

 

 

 

 

 

 

 

31,702

 

 

Stock-based compensation expense from continuing operations

799

 

 

 

633

 

 

 

2,533

 

 

 

1,761

 

 

Change in fair value of derivatives liability

 

 

 

(56

)

 

 

(4

)

 

 

7

 

 

Change in fair value of Bookings Commitment

(3,670

)

 

 

(657

)

 

 

1,133

 

 

 

3,070

 

 

Noncash interest expense related to convertible notes

58

 

 

 

1,644

 

 

 

568

 

 

 

4,779

 

 

Intangible amortization from continuing operations

2,222

 

 

 

2,165

 

 

 

6,646

 

 

 

6,184

 

 

Securities litigation costs

 

 

 

 

 

 

 

 

 

(103

)

 

Tax benefit (provision) resulting from certain noncash tax items

(17

)

 

 

20

 

 

 

(105

)

 

 

(16

)

 

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

(608

)

 

 

3,749

 

 

 

11,513

 

 

 

47,384

 

 

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

$

(11,451

)

 

 

$

(7,235

)

 

 

$

(30,065

)

 

 

$

(20,795

)

 

 

 

 

 

 

 

 

 

Weighted average basis common shares outstanding

115,243,671

 

 

 

110,929,357

 

 

 

113,706,124

 

 

 

110,859,611

 

 

 

 

 

 

 

 

 

 

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

$

(0.10

)

 

 

$

(0.07

)

 

 

$

(0.26

)

 

 

$

(0.19

)

 

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
September 30,

 

Nine Months Ended
September 30,

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net loss per common share from continuing operations attributable to NantHealth

$

(0.09

)

 

 

$

(0.10

)

 

 

$

(0.37

)

 

 

$

(0.62

)

 

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

 

 

 

 

 

 

 

Loss on Exchange and Prepayment of 2016 Notes

 

 

 

 

 

 

0.01

 

 

 

 

 

Loss from related party equity method investment

 

 

 

 

 

 

 

 

 

0.28

 

 

Stock-based compensation expense from continuing operations

0.01

 

 

 

0.01

 

 

 

0.03

 

 

 

0.02

 

 

Change in fair value of derivatives liability

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of Bookings Commitment

(0.04

)

 

 

(0.01

)

 

 

0.01

 

 

 

0.03

 

 

Noncash interest expense related to convertible notes

 

 

 

0.01

 

 

 

 

 

 

0.04

 

 

Intangible amortization from continuing operations

0.02

 

 

 

0.02

 

 

 

0.06

 

 

 

0.06

 

 

Securities litigation costs

 

 

 

 

 

 

 

 

 

 

 

Tax benefit (provision) resulting from certain noncash tax items

 

 

 

 

 

 

 

 

 

 

 

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

(0.01

)

 

 

0.03

 

 

 

0.11

 

 

 

0.43

 

 

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

$

(0.10

)

 

 

$

(0.07

)

 

 

$

(0.26

)

 

 

$

(0.19

)

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20211104006140/en/

CONTACT: Investor Contact:

Robert Jaffe

rjaffe@rjaffeco.com

424.288.4098

KEYWORD: UNITED STATES NORTH AMERICA NORTH CAROLINA

INDUSTRY KEYWORD: DATA MANAGEMENT HEALTH TECHNOLOGY PRACTICE MANAGEMENT SOFTWARE NETWORKS

SOURCE: NantHealth, Inc.

Copyright Business Wire 2021.

PUB: 11/04/2021 04:06 PM/DISC: 11/04/2021 04:07 PM

http://www.businesswire.com/news/home/20211104006140/en