SOC Telemed (TLMD) Stock: Why The Price Surged Today

By Amit Chowdhry ● Nov 12, 2021
  • The stock price of SOC Telemed, Inc., (NASDAQ: TLMD) increased by over 30% during intraday trading today. This is why it happened.

The stock price of SOC Telemed, Inc., (NASDAQ: TLMD) – the largest national provider of acute care telemedicine – increased by over 30% during intraday trading today. Investors are responding positively to the company’s Q3 2021 financial results.

Q3 And Recent Highlights

— SOC Telemed took steps to shore up its balance sheet, reaching an agreement with SLR Investment Corp. to allow the company to accelerate the drawdown of an additional $12.5 million in term debt to bolster its cash position

— In October, the company completed an organizational review and announced an enterprise-wide restructuring plan, which is expected to result in $7 million to $9 million in annualized cost savings beginning in 2022. And the resulting headcount reduction of roughly 12% of the company’s non-clinical staff and other actions are expected to result in up to $3 million in restructuring costs consisting of roughly $2 million in severance and termination benefits and $1 million for site closures and other exit and disposal costs

— In September, SOC Telemed and OB Hospitalist Group (OBHG) announced a collaboration combining OBHG’s leading OB hospitalist programs with SOC Telemed’s maternal-fetal medicine (MFM) experts. And the first hospital partner, Hendrick Medical Center in Abilene, Texas, went live with the new service in August 2021. The combined hospitalist/teleMFM offering will expand to additional OBHG hospital sites nationwide

— In September, SOC Telemed announced the appointment of a new leadership team naming Dr. Chris Gallagher as CEO, David Mikula as COO, and Joe Greskoviak as Vice-Chairman. And the company named David Fletcher as Interim CFO

Financial Results Summary For The 3 Months Ended September 30, 2021

— Revenue totaled $26.7 million compared to $15.1 million, up 76%

— Bookings totaled $9.0 million, up 247%

— Access Physicians contributed $9.7 million of revenue

— GAAP gross profit totaled $8.1 million compared to $5.6 million

— Adjusted gross profit (non-GAAP) totaled $9.5 million compared to $6.6 million

— GAAP gross margin was 30% compared to 37%

— Adjusted gross margin (non-GAAP) was 36% compared to 44%. Results were negatively impacted primarily by an increase in physician incentive payments related to the rapid increase and volatility of consult demand and the lack of availability of fully licensed and privileged physicians needed to conduct consults

— Net loss totaled $(10.6) million compared to a net loss of $(9.7) million

— Adjusted EBITDA loss (non-GAAP) totaled $(5.6) million compared to $(2.9) million

Updated 2021 Financial Outlook

For the full year 2021, SOC Telemed is providing the following revised financial guidance:

— GAAP Revenue is expected to be in the range of $91.5 million to $93.5 million, with approximately 30% expected to be attributed to Access Physicians, an increase from the prior guidance range of $90 million to $92 million

— The upward guidance revision is the result of improved consultation volume and new implementations

— Adjusted EBITDA is expected to be in the range of $(21.5) million to $(22.5) million, and improvement from the prior guidance range of $(22.0) million to $(25.0) million

KEY QUOTE:

“We are proud of our third quarter results as the new organization came together with renewed focus resulting in the highest quarterly revenue and bookings in our company’s history. Upon joining the company, my first task has been to launch an enterprise-wide transformation of the legacy businesses, align our business objectives, and drive greater efficiencies throughout the organization. Our recently announced restructuring helps position the company to continue to lead the industry, effectively service our clients and grow in line with our sales momentum. The cost reductions recognized as part of the restructuring will allow us to invest in areas known to be important to our market position and growth. We are grateful for the contributions of all of our employees, including those affected by the restructuring.”

— Dr. Chris Gallagher, Chief Executive Officer

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.