Catasys, Inc. (NASDAQ: CATS) (“Catasys” or the “Company”), a leading AI and technology-enabled healthcare company, today reported its financial results for the second quarter ended June 30, 2019. The Company provides big data-based analytics and predictive identification and engagement capabilities to health plans and their members through its OnTrak™ solution on the Catasys PRE™ platform.
Management Commentary
Mr. Terren Peizer, Chairman and CEO, stated, “Our outreach pool surpassed the milestone 100,000 eligible lives during the 2019 second quarter as we once again achieved strong year-over-year growth in enrollment and revenues as a result of expansion within existing agreements with health plan partners. Catasys continued to drive innovation in healthcare technologies with the launch of Catasys PRE (Predict-Recommend-Engage), a platform that extends our predictive identification capabilities and proactive delivery of interventions for those with behavioral health conditions to include care avoidant individuals with chronic disease. This goes hand in hand with our new strategic partnership with digital therapeutics company Canary Health whereby Catasys is piloting Canary Health’s Better Choices, Better Health series of peer-moderated online workshops designed to empower individuals to manage their chronic conditions. As we continue to develop new technologies and forge partnerships with leading healthcare companies, we look forward to improving the lives of members while driving cost savings for health plans.”
Outlook for 2019
Mr. Peizer continued, “In the first half of 2019, we nearly matched revenue levels of full-year 2018. Our outreach pool continues its rapid ramp-up, which will serve as the primary driver for new enrollment growth in the second half of 2019 and into next year. Despite our significant growth, we believe this year represents a transitional year to the exponential growth rates that we anticipate for 2020 and beyond. To that end, we are building out the infrastructure that is needed to support future growth and the scaling of the business. We have made a few key additions to our leadership team in the past few months and believe these individuals will make valuable contributions toward helping us execute on our strategic objectives. As the first half of 2019 delivered the significant growth we expected to see, we are reiterating our previous guidance of $35 million in revenues for 2019 and remain confident that the second half of the year will deliver even stronger results.”
Company Reiterates 2019 GAAP Revenue Guidance
2019 Second Quarter and Recent Operating Highlights
2019 Second Quarter and Six Months Financial Review
Revenues
Gross Margin
Operating Expenses
Net Income (Loss)
Conference Call – Wednesday, August 14, 2019 – 4:30 pm ET
The Company will host a conference call/webcast on Wednesday, August 14, 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/31789/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) |
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Expiration Date: |
8/21/2019 |
About Catasys, Inc.
Catasys, Inc. is a leading AI and technology-enabled healthcare company whose mission is to help improve the health and save the lives of as many people as possible. Its Catasys PRE™ (Predict-Recommend-Engage) platform predicts people whose chronic disease will improve with behavior change, recommends effective care pathways that people are willing to follow, and engages people who aren’t getting the care they need. By combining predictive analytics with human engagement, Catasys delivers improved member health and validated outcomes and savings to healthcare payers.
Catasys’ integrated, technology-enabled OnTrak solution, a critical component of the Catasys PRE platform, is designed to treat members with behavioral conditions that cause or exacerbate chronic 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 who address the social and environmental determinants of health, including loneliness. 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 leading national and regional health plans in 27 states.
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 STATEMENTS OF OPERATIONS |
||||||||||||||||
(in thousands, except per share data) |
||||||||||||||||
(unaudited) |
||||||||||||||||
(in thousands) |
For the Three Months Ended
|
|
For the Six Months Ended
|
|||||||||||||
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||||
Revenue | $ |
7,681 |
|
$ |
3,273 |
|
$ |
14,492 |
|
$ |
5,184 |
|
||||
Cost of revenue |
|
4,365 |
|
|
2,941 |
|
|
7,392 |
|
|
5,228 |
|
||||
Gross profit / (loss) |
|
3,316 |
|
|
332 |
|
|
7,100 |
|
|
(44 |
) |
||||
Operating expenses |
|
8,223 |
|
|
4,477 |
|
|
14,522 |
|
|
8,348 |
|
||||
Operating loss |
|
(4,907 |
) |
|
(4,145 |
) |
|
(7,422 |
) |
|
(8,392 |
) |
||||
Other income |
|
8 |
|
|
- |
|
|
14 |
|
|
40 |
|
||||
Interest expense |
|
(471 |
) |
|
(36 |
) |
|
(792 |
) |
|
(37 |
) |
||||
Change in fair value of warrant liability |
|
(120 |
) |
|
(19 |
) |
|
(211 |
) |
|
(29 |
) |
||||
Net loss | $ |
(5,490 |
) |
$ |
(4,200 |
) |
$ |
(8,411 |
) |
$ |
(8,418 |
) |
||||
Net loss per share, basic and diluted from operations: | $ |
(0.34 |
) |
$ |
(0.26 |
) |
$ |
(0.51 |
) |
$ |
(0.53 |
) |
||||
Weighted-average shares used to compute basic and diluted net loss per share |
|
16,315 |
|
|
15,913 |
|
|
16,398 |
|
|
15,906 |
|
CATASYS, INC. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(in thousands, except share and per share data) |
||||||||
June 30, | December 31, | |||||||
2019 |
2018 |
|||||||
(Unaudited) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and restricted cash | $ |
7,059 |
|
$ |
3,162 |
|
||
Receivables, net |
|
2,576 |
|
|
1,382 |
|
||
Unbilled receivables |
|
1,055 |
|
|
- |
|
||
Prepaid expenses and other current assets |
|
724 |
|
|
942 |
|
||
Total current assets |
|
11,414 |
|
|
5,486 |
|
||
Long-term assets: | ||||||||
Property and equipment, net of accumulated depreciation of $1,556 and $1,801, respectively |
|
359 |
|
|
263 |
|
||
Restricted cash, long-term |
|
408 |
|
|
408 |
|
||
Right-of-use assets |
|
2,595 |
|
|
- |
|
||
Debt issuance costs |
|
1,284 |
|
|
- |
|
||
Deposits and other assets |
|
- |
|
|
166 |
|
||
Total assets | $ |
16,060 |
|
$ |
6,323 |
|
||
Liabilities and stockholders' deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ |
1,459 |
|
$ |
497 |
|
||
Accrued compensation and benefits |
|
1,988 |
|
|
1,537 |
|
||
Deferred revenue |
|
4,033 |
|
|
4,195 |
|
||
Current portion of long-term debt |
|
1,917 |
|
|
- |
|
||
Current portion of obligations under operating leases |
|
525 |
|
|
- |
|
||
Other accrued liabilities |
|
1,953 |
|
|
1,501 |
|
||
Total current liabilities |
|
11,875 |
|
|
7,730 |
|
||
Long-term liabilities: | ||||||||
Long-term lease liabilities |
|
1,780 |
|
|
- |
|
||
Long-term debt, net of discount of $365 and $478, respectively |
|
13,618 |
|
|
7,472 |
|
||
Warrant liabilities |
|
842 |
|
|
86 |
|
||
Other long-term liabilities |
|
100 |
|
|
- |
|
||
Total liabilities |
|
28,215 |
|
|
15,288 |
|
||
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; 16,536,992 and 16,185,146 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively |
|
2 |
|
|
2 |
|
||
Additional paid-in capital |
|
301,909 |
|
|
296,688 |
|
||
Accumulated deficit |
|
(314,066 |
) |
|
(305,655 |
) |
||
Total stockholders' deficit |
|
(12,155 |
) |
|
(8,965 |
) |
||
Total liabilities and stockholders' deficit | $ |
16,060 |
|
$ |
6,323 |
|
CATASYS, INC. |
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOW |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
For the Six Months Ended June 30, | ||||||||
2019 |
2018 |
|||||||
Cash flows used in operating activities | ||||||||
Net loss | $ |
(8,411 |
) |
$ |
(8,418 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation |
|
72 |
|
|
170 |
|
||
Amortization of debt discount included in interest expense |
|
146 |
|
|
10 |
|
||
Warrant issued for services |
|
- |
|
|
86 |
|
||
Warrants issued for investor relations |
|
43 |
|
|
- |
|
||
Loss on disposal of fixed assets |
|
- |
|
|
68 |
|
||
Deferred rent |
|
(26 |
) |
|
(25 |
) |
||
Stock-based compensation expense |
|
2,591 |
|
|
753 |
|
||
Amortization of debt issuance costs |
|
112 |
|
|
- |
|
||
Change in fair value of warrant liability |
|
211 |
|
|
29 |
|
||
Shares issued for services |
|
- |
|
|
112 |
|
||
Changes in operating assets and liabilities: | ||||||||
Receivables |
|
(1,194 |
) |
|
(629 |
) |
||
Unbilled receivables |
|
(1,055 |
) |
|
- |
|
||
Operating leases liability |
|
525 |
|
|
- |
|
||
Prepaids and other current assets |
|
218 |
|
|
165 |
|
||
Deferred revenue |
|
(162 |
) |
|
2,379 |
|
||
Accounts payable and other accrued liabilities |
|
975 |
|
|
1,466 |
|
||
Net cash used in operating activities | $ |
(5,955 |
) |
$ |
(3,834 |
) |
||
Cash flows provided by financing activities | ||||||||
Proceeds from secured promissory note | $ |
- |
|
$ |
5,000 |
|
||
Proceeds from revolving loan |
|
7,500 |
|
|
- |
|
||
Proceeds from A/R Facility |
|
1,938 |
|
|
- |
|
||
Repayment of A/R Facility |
|
(1,938 |
) |
|
- |
|
||
Debt issuance costs |
|
(133 |
) |
|
(324 |
) |
||
Proceeds from warrant exercise |
|
1,028 |
|
|
- |
|
||
Proceeds from options exercise |
|
1,473 |
|
|
- |
|
||
Capital lease obligations |
|
(16 |
) |
|
(18 |
) |
||
Net cash provided by financing activities | $ |
9,852 |
|
$ |
4,658 |
|
||
Net increase in cash and restricted cash | $ |
3,897 |
|
$ |
824 |
|
||
Cash and restricted cash at beginning of period |
|
3,570 |
|
|
4,779 |
|
||
Cash and restricted cash at end of period | $ |
7,467 |
|
$ |
5,603 |
|
||
Supplemental disclosure of cash flow information: | ||||||||
Interest paid | $ |
792 |
|
$ |
37 |
|
||
Non cash financing and investing activities: | ||||||||
Warrant issued in connection with A/R Facility | $ |
21 |
|
$ |
63 |
|
||
Reclassification of warrant liability to equity upon amendment of the Loan Agreement | $ |
86 |
|
$ |
- |
|
||
Warrants issued in connection with revolving loan | $ |
610 |
|
$ |
- |
|
||
Property and equipment acquired through capital leases | $ |
154 |
|
$ |
- |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190814005662/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]