Catasys, Inc. (NASDAQ:CATS) (“Catasys” or the “Company”), a leading AI and technology-enabled healthcare company, today reported its financial results for the first quarter ended March 31, 2019. The Company provides big data-based analytics and predictive modeling driven healthcare services to health plans and their members through its OnTrak™ solution.
Management Commentary
Mr. Terren Peizer, Chairman and CEO, stated, “The first quarter continued the positive momentum Catasys built throughout the past year, as considerable growth in our outreach population due to expansion within our existing agreements with health plans led to strong enrollment and top line improvement during the period. Catasys continued to focus on leveraging its technological expertise to drive innovative solutions to address a wider populace, as evidenced by today’s announcement that we are expanding the use of OnTrak to help identify and address the epidemic of social isolation and loneliness, a key social determinant of health. In addition, we will continue to pursue partnerships with technology companies such as Circulation and Lyft. This particular partnership will combine our OnTrak Care Team’s ability to engage members with Circulation’s ability to provide safe and secure transportation through Lyft and other providers. By identifying member vulnerabilities and overcoming barriers to both engagement and treatment, we will be able to substantially improve member health.”
Outlook for 2019
Mr. Peizer continued, “Our outreach population continues to grow ahead of expectations, and we believe that reaching 100,000 eligible lives is imminent. We are reiterating our previous guidance of $35 million in revenues for 2019, which does not include new contracts and subsequent launches, initial launches of existing contracts, new expansions within existing contracts, or new product sales, all of which may increase our outreach pool through the remainder of the year. If and when these possible subsequent developments occur, the Company may revise guidance. Operationally, we are very excited about the progress we have made so far in 2019, and feel even stronger about our future potential. We have focused on reinvesting in our business throughout this growth phase, including strengthening our senior management team, enhancing our technological capabilities to better serve members and delivering validated cost savings to health plan customers.”
Company Reiterates 2019 GAAP Revenue Guidance
2019 First Quarter and Recent Operating Highlights
Management Commentary on 2019 First Quarter Operating Results
Mr. Rick Anderson, President and COO, stated, “Favorable enrollment trends continued to drive higher revenues during the period, largely due to expansions within existing agreements with our health plan customers to include new states and treatments. We recently announced an agreement with Optima Health to provide our OnTrak solution to eligible Commercial members in Virginia, which is expected to launch in the second quarter of 2019, and also expanded our OnTrak-Ci program with a leading health insurance provider to eligible Medicare Advantage members in two new states, Alabama and Mississippi, as well as Florida. In addition, Catasys expanded its OnTrak-C solution to eligible Medicaid members in Texas, which will now be able to participate in OnTrak for treatment of anxiety and depression, as well as substance use disorders. The Company remains in discussions with several customers regarding potential expansions in the form of new states, new lines of business or utilizing our technological advancements to expand coverage to new populations.”
2019 First Quarter Financial Review
Revenues
Gross Margin
Operating Expenses
Net Income (Loss)
Conference Call – Thursday, May 9, 2019 – 4:30 pm ET
The Company will host a conference call/webcast on Thursday, May 9, 2019, at 4:30 pm ET/1:30 pm PT.
Investors, analysts, employees and the public are invited to listen to the conference call via:
Conference Call
877-705-2969 (domestic) or 201-689-8868 (international)
Webcast
https://78449.themediaframe.com/dataconf/productusers/cats/mediaframe/30211/indexl.html.
Those who are unable to attend the conference call live can use the following information to hear a replay version:
Conference ID#: | 13672721 | |
Conference Call Replay: | 877-660-6853 (domestic) or 201-612-7415 (international) | |
Expiration Date: | 5/16/2019 | |
About Catasys, Inc.
Catasys, Inc. harnesses proprietary big data predictive analytics, artificial intelligence and telehealth, combined with human interaction, to deliver improved member health and validated outcomes and savings to health plans. Our mission is to help improve the health and save the lives of as many people as possible.
Catasys' integrated, technology-enabled OnTrak solution--contracted with a growing number of national and regional health plans--is designed to treat members with behavioral conditions that cause or exacerbate co-existing medical conditions such as diabetes, hypertension, coronary artery disease, COPD, and congestive heart failure, which result in high medical costs.
Catasys has a unique ability to engage these members, who do not otherwise seek behavioral healthcare, leveraging proprietary enrollment capabilities built on deep insights into the drivers of care avoidance. OnTrak integrates evidence-based psychosocial and medical interventions delivered either in-person or via telehealth, along with care coaching and in-market Community Care Coordinators. The program improves member health and delivers validated cost savings to healthcare payers of more than 50 percent for enrolled members. OnTrak is available to members of several leading health plans in Alabama, California, Connecticut, Florida, Georgia, Illinois, Iowa, Kansas, Kentucky, Louisiana, Massachusetts, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia and Wisconsin.
Learn more at www.catasys.com.
Forward-Looking Statements
Except for statements of historical fact, the matters discussed in this press release are forward-looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond our control, which may cause actual results to differ materially from stated expectations. These risk factors include, among others, changes in regulations or issuance of new regulations or interpretations, limited operating history, our inability to execute our business plan, increase our revenue and achieve profitability, lower than anticipated eligible members under our contracts, our inability to recognize revenue, lack of outcomes and statistically significant formal research studies, difficulty enrolling new members and maintaining existing members in our programs, the risk that treatment programs might not be effective, difficulty in developing, exploiting and protecting proprietary technologies, intense competition and substantial regulation in the health care industry, the risks associated with the adequacy of our existing cash resources and our ability to continue as a going concern, our ability to raise additional capital when needed and our liquidity. You are urged to consider statements that include the words "may," "will," "would," "could," "should," "believes," "estimates," "projects," "potential," "expects," "plan," "anticipates," "intends," "continues," "forecast," "designed," "goal," or the negative of those words or other comparable words to be uncertain and forward-looking. For a further list and description of the risks and uncertainties we face, please refer to our most recent Securities and Exchange Commission filings which are available on its website at http://www.sec.gov. Such forward-looking statements are current only as of the date they are made, and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
CATASYS, INC. | ||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS | ||||||||||
(in thousands, except per share data) | ||||||||||
(unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 31, | ||||||||||
2019 | 2018 | |||||||||
Revenue | $ | 6,811 | $ | 1,911 | ||||||
Cost of revenue | 3,027 | 2,287 | ||||||||
Gross profit (loss) | 3,784 | (376 | ) | |||||||
Operating expenses | 6,299 | 3,871 | ||||||||
Operating loss | (2,515 | ) | (4,247 | ) | ||||||
Other income | 6 | 40 | ||||||||
Interest expense | (321 | ) | (1 | ) | ||||||
Change in fair value of warrant liability | (91 | ) | (10 | ) | ||||||
Net loss | $ | (2,921 | ) | $ | (4,218 | ) | ||||
Net loss per share, basic and diluted from operations: | $ | (0.18 | ) | $ | (0.27 | ) | ||||
Weighted-average shares used to compute basic and diluted net loss per share | 16,198 | 15,898 | ||||||||
CATASYS, INC. | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands, except share and per share data) | ||||||||||
(unaudited) | ||||||||||
March 31, | December 31, | |||||||||
2019 | 2018 | |||||||||
Assets | ||||||||||
Current assets | ||||||||||
Cash and restricted cash | $ | 1,296 | $ | 3,162 | ||||||
Receivables, net | 3,601 | 1,382 | ||||||||
Prepaid expenses and other current assets | 948 | 942 | ||||||||
Total current assets | 5,845 | 5,486 | ||||||||
Long-term assets | ||||||||||
Property and equipment, net of accumulated depreciation of $1,839 and $1,801, respectively | 225 | 263 | ||||||||
Restricted cash, long term | 408 | 408 | ||||||||
Debt issuance costs | 739 | 166 | ||||||||
Total Assets | $ | 7,217 | $ | 6,323 | ||||||
Liabilities and stockholders' deficit | ||||||||||
Current liabilities | ||||||||||
Accounts payable | $ | 819 | $ | 497 | ||||||
Accrued compensation and benefits | 1,177 | 1,537 | ||||||||
Deferred revenue | 3,694 | 4,195 | ||||||||
Loan payable | 1,167 | - | ||||||||
Other accrued liabilities | 1,623 | 1,501 | ||||||||
Total current liabilities | 8,480 | 7,730 | ||||||||
Long-term liabilities | ||||||||||
Long term debt, net of discount of $423 and $478, respectively | 8,861 | 7,472 | ||||||||
Warrant liabilities | 552 | 86 | ||||||||
Total Liabilities | 17,893 | 15,288 | ||||||||
Commitments and Contingencies | ||||||||||
Stockholders' deficit | ||||||||||
Preferred stock, $0.0001 par value; 50,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||||
Common stock, $0.0001 par value; 500,000,000 shares authorized; 16,205,146 and 16,185,146 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 2 | 2 | ||||||||
Additional paid in capital | 297,898 | 296,688 | ||||||||
Accumulated deficit | (308,576 | ) | (305,655 | ) | ||||||
Total Stockholders' deficit | (10,676 | ) | (8,965 | ) | ||||||
Total Liabilities and stockholders' deficit | $ | 7,217 | $ | 6,323 | ||||||
CATASYS, INC. | ||||||||||
CONSOLIDATED STATEMENT OF CASH FLOWS | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
Three Months Ended | ||||||||||
March 31, | ||||||||||
2019 | 2018 | |||||||||
Operating activities: | ||||||||||
Net loss | $ | (2,921 | ) | $ | (4,218 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||
Depreciation and amortization | 38 | 85 | ||||||||
Amortization of debt discount | 44 | - | ||||||||
Warrants issued for services | - | 86 | ||||||||
Deferred rent | (26 | ) | (22 | ) | ||||||
Stock compensation expense | 1,024 | 328 | ||||||||
Amortization of debt issuance costs | 56 | - | ||||||||
Common stock issued for services | - | 112 | ||||||||
Fair value adjustment on warrant liability | 91 | 10 | ||||||||
Changes in current assets and liabilities: | ||||||||||
Receivables | (2,219 | ) | (700 | ) | ||||||
Prepaids and other current assets | (6 | ) | 12 | |||||||
Deferred revenue | (501 | ) | 652 | |||||||
Accounts payable and other accrued liabilities | 61 | 239 | ||||||||
Net cash used in operating activities | $ | (4,359 | ) | $ | (3,416 | ) | ||||
Financing activities: | ||||||||||
Proceeds from Horizon revolving loan | $ | 2,500 | $ | - | ||||||
Debt issuance costs | (105 | ) | - | |||||||
Capital lease obligations | (2 | ) | (9 | ) | ||||||
Proceeds from warrant exercise | 100 | - | ||||||||
Net cash provided by (used in) financing activities | $ | 2,493 | $ | (9 | ) | |||||
Reconciliation of cash and restricted cash: | ||||||||||
Cash | 1,296 | 3,091 | ||||||||
Restricted cash | 408 | 479 | ||||||||
Total cash and restricted cash | $ | 1,704 | $ | 3,570 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||
Interest | $ | 192 | $ | 363 | ||||||
Non-cash activity investing and financing activities: | ||||||||||
Warrants issued in connection with A/R Facility | $ | - | $ | 64 | ||||||
Warrants issued in connection with Horizon financing | $ | 461 | $ | - | ||||||
Reclassification of warrant liability to equity upon adoption of ASU 2017-11 | $ | 86 | $ | - |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190509005896/en/
For Investors:
Catasys, Inc.
Ariel
Davis
Phone: 310-444-4346
Email: [email protected]
For Media:
Catasys, Inc.
Cathy
Finley
Phone: 310-444-4308
Email: [email protected]