Q4 2020 NantHealth Inc Earnings Call

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Good afternoon, ladies and gentlemen, and welcome to the mantle of 'twenty 'twenty fourth quarter and full year financial results Conference call. At this time, all participants are in a listen only mode. The young.

We will conduct the question and answer session and instructions will follow at that range. If any once you to client interest. Thanks. During the conference. Please press Star then zero on your Touchtone telephone as a reminder of this conference call may be recorded I would now like to turn the conference over to your host today, Mr. Robert Jaffe Investor Relations Officer, Sir.

Sir the floor is yours.

Welcome everyone and thank you for joining us today to discuss NAND helps 2024th quarter financial results.

On the call today are Ron Louks, Chief operating Officer, Bob Petrou, Chief Financial Officer, Steve <unk> Senior Vice President of machine learning on research.

The call is being broadcast live at Www Dot <unk> Dot com, a playback will be available for three months on the handheld the website.

I would like to make the cautionary statement and remind everyone that all of the information discussed on today's call is covered under the safe Harbor provision of the litigation Reform Act the.

The company's discussion today will include forward looking information, reflecting management's current forecast of certain aspects of the company's future and actual results could differ materially from those stated or implied.

In addition, during the course of this call we may refer to non-GAAP financial measures that are not prepared in accordance with U S. Generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies.

Investors are encouraged to review Nantel the press release announcing its full 2024th quarter and full year financial results on.

Of the company's reasons for including those non-GAAP financial measures in its financial results announcement.

The reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures is also contained in the Companys earnings press release issued earlier today.

And the moment, Ron will provide a brief overview of the quarter and discuss the business followed by Bob who will discuss the financial results in more detail.

We will then open the call for questions with that said I will now turn the call over to Ron Louks Bob.

Yeah.

Okay.

Thanks, Robert Good afternoon, everyone and welcome to NAV, how 2024th quarter and full year financial results Conference call.

We hope all of the younger families continue to be safe and well.

I'm pleased with our achievements over the past year, especially given the challenges of operating the business, while managing through COVID-19.

On span on diversified our shopper portfolio on the services offerings with the recent acquisition of a boat but out of mass.

We believe open unless provides a number of cross marketing opportunities.

Allow us to expanding the industries beyond health care.

We streamlined our business and improve the capital structure, but the divestiture of our connected care business for more than $47 million.

You need to invest in our data solutions capabilities, and we delivered expanded capabilities on our NAV of that that would be SaaS products.

In addition, as part of our net health care of initiative, we support of the health care providers of medical staff by offering at no cost for the entire month of man on the Avnet all per platform to.

To providers.

Even with the month of free access all of Air revenue grew in 2020 and add more than 15 out of providers. So its network.

Now, let's briefly turn to our 2024th quarter financial results.

Total revenue was $18 $6 million.

Gross margin was 61% of net revenue of the highest in the company's history.

Florida, SG&A expenses, and we increased our investment in R&D.

Bob will discuss the financials in more detail shortly.

Let's discuss the software and services business.

Our revenue business side of it.

No on game with the Maryland based health plan for an additional three years and expanded products and services within the plan.

The continued to expand out of any connect across the Medicaid population of a leading U S health insurance company of the <unk>.

The <unk> States originally announced eight states of gone live from the fourth quarter of 2020.

And we lost share of any connect a dot two which included a major expansion of our dream of warning of deviation feature the results with significant savings of delivery of care of as far of justification.

Turning on their engagement inside of the three year or know of agreement for NAV and that all of them with one of the nation's leading Medicaid managed care organizations strengthening of nearly 20 year partnership.

The loss of collaboration of assessment incorporated that enabled the out of that provided us the utilized sesame as payment tools, we introduced new network analytics solutions, which focuses on providing a health plan partners with the actionable insights into their providers that are of that activity.

And we enhance the open authorizations with more seamlessly on part of providers on where and how the request service approval from their house from the patient's health plans.

Turning on our recently acquired network monitoring business open NMS, we deployed our close of the streaming analytics versions of Fortune 500 of energy company decommissioning of replacing their existing solution.

We're really just helping on the rest of horizon 27 of Edo visitors from digital experience monitoring of support programs can pay.

And finally, an update on precision medicine of artificial intelligence fitness, Inc.

In December we presented significant treatment of insights at the 2020, San Antonio breast cancer symposium around the adoption of Trastuzumab biosimilars on the treatment of her two positive breast cancer and the potential clinical and cost benefits of Biosimilars.

In November that helps a lot with our sister company, meaning <unk> announced the publication of nature scientific reports on the study that reveals the RNA sequencing is not only viable but may also provide significant clinical value and analyzing of cancer patients specific disease biology to name a loss of life treatment decision with the higher likelihood of success.

And in October net health, along with the Muni by on the anti <unk> presented the results of the 2020 of American Association of of Cancer Research Virtual Special conference on the use of deep learning models, and providing significant risk assessment of survival in pancreatic cancer patients all of the promise of prognostic technology to sum up despite the COVID-19.

19, we achieved the number of vehicles, including extending and diversifying our software portfolio of services offerings with the acquisition of open on that.

And streaming of IR streamlining our business and improving on our capital structure with the divestiture of our connected care business.

Because you didn't invest in our data solutions in the United capabilities, and we expanded our offering of NAV that seem to have any SaaS products and we of purportedly were part of the solid overall financial part of the gross margin increasing to 61% on the fourth quarter was that already in the business I'll turn the call over to Bob to the test of financial results in more detail Bob.

Okay.

Thank you Robert.

Revenue for the fourth quarter increased to $18 six 4 million from $18 $5 6 million in the prior year fourth quarter. The slightly higher revenues were largely attributable to our open on the mass business, which we acquired in the third quarter of 2020.

Total software related revenues for the fourth quarter increased by 1% to $18 6 million from $18 4 million of the last year's fourth quarter.

Revenue for the full year of declined to $73 2 million from $77 4 million in 2019.

This was primarily due to the divestiture of the essential on reduction in our GPS business. However, total software related revenue for 2020 increased to $73 million from $72 8 million in 2019.

Gross profit for the fourth quarter grew the 11 4 million or 61% revenue a solid increase from $10 $8 million of 58% of revenue from the same quarter of the prior year.

For 2020 full year gross profit grew to $43 9 million of 60% of from $43 $3 million of 56% of the total revenue in 2019 the.

The gross margin improvement was primarily due to the changes in product mix specifically the continued growth of our software related business and the associated reduction in GPS activity.

Q4, total operating expenses increased 6% to $18 2 million from $17 2 million in the prior year driven by new costs associated with opening on the mass as well as our ongoing investments in our other assets.

For the full year 2020, total operating expenses decreased by $7 5 million, representing a 10% of improvement from the year previous.

For the 2024th quarter net loss from continuing operations of attributable to net outflows of $20 1 million or 18 per share compared with $13 2 million or <unk> 12 per share on the prior year fourth quarter.

Excluding the allscripts booking commitment of eight point.

$1 million in Q4 net loss from continuing operations attributable to net health was $12 million compared with $12 8 million in the prior year fourth quarter.

For the full year 2020, net loss from continuing operations of attributable to net health was $88 3 million, which included a $28 2 million write down from related to NAV all mix in the $11 2 million charge related to an allscripts booking commitment. This compares with net loss from continuing.

<unk> attributable to net held for 2019 of $65 4 million.

Excluding the net <unk> write down on the Allscripts booking commitments, which are non cash charges net loss from continuing operations of true Bill to net health was $48 $9 million.

On the non-GAAP basis net loss from continuing operations attributable to net Health, Inc. Q4 was $6 2 million or <unk> <unk> per share compared with $5 7 million or <unk> <unk> per share for the fourth quarter of last year.

For the 2020 full year of non-GAAP net loss from continuing operations attributable to net health improved $27 million or 24 per share from $30 $1 million of 27 per share in 2019, representing in the 11% improvement year over year.

Finally, cash and cash equivalents were $22 8 million at December 31, 2020, compared with $25 9 million at the end of our third quarter net usage of cash was $3 1 million if the exclusion of our ongoing the interest payments due on December cash flow would have been approximately neutral in the <unk>.

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Additionally, in Q4, we renewed our letter of credit of the increased funds available to draw on two of $125 million.

We continue to have adequate sources of funding to ensure investments in our operations with that I will now turn the call back over to Robert.

Thanks, Bob Operator that concludes our prepared remarks, we'd now like to open the calls the.

Two questions. Thank.

Thank you, ladies and gentlemen, as a reminder, if you have a question at this time. Please press Star then the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please go ahead of the mountain.

I see no one in the queue I'll turn the call back over to Robert for any closing remarks.

Thanks, operator.

Folks thanks for joining us today, we look forward to sharing our progress on our next scheduled conference call. Thank you again for joining us today.

Concludes the call.

Thank you speakers, ladies and gentlemen. This concludes today's conference call. Thank you all for joining you may now disconnect.

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