The Oncology Institute Reports First Quarter 2022 Financial Results and Confirms Full Year 2022 Guidance
The Oncology Institute, Inc. (NASDAQ: TOI) reported Q1 2022 revenue of $55 million, a 14% increase year-over-year, driven by expansion into new markets and value-based partnerships. Patient Services revenue rose 18.3% to $35 million. Gross profit increased by 20.8% to $12 million, supported by improved cost management. However, SG&A expenses surged to $30 million, up from $11 million, impacting adjusted EBITDA, which stood at $(5) million. TOI maintains its 2022 revenue guidance of $270 to $310 million, reflecting a growth of 33% to 53% over 2021.
- Q1 2022 revenue of $55 million, a 14% increase compared to Q1 2021.
- Gross profit rose by 20.8% to $12 million due to improved cost management.
- Patient Services revenue grew 18.3% to $35 million.
- Three new value-based partnerships initiated, including one with MaxHealth.
- Expansion into Polk County, Florida, and opening of a new clinic in Culver City, California.
- SG&A expenses increased significantly to $30 million, or 54% of revenue, up from $11 million or 23% of revenue in Q1 2021.
- Adjusted EBITDA was $(5) million, a decrease of $5 million compared to Q1 2021.
CERRITOS, Calif., May 11, 2022 (GLOBE NEWSWIRE) -- The Oncology Institute, Inc. (NASDAQ: TOI), one of the largest value-based community oncology groups in the United States, today reported financial results for its first quarter ended March 31, 2022.
"We are pleased with the results we achieved in Q1 2022, driven by our expansion in new markets and continued investment in a value-based approach to oncology. Our financial results reflected strong growth, with Q1 2022 revenue of
First Quarter 2022 Operational Highlights
- Initiated three new value-based partnerships, including our third gain share contract in Florida with MaxHealth
- Hired five new clinicians, ending the period with 84 clinicians, representing a
24% growth compared to Q1 2021 - Commenced expansion of our radiation oncology site in Long Beach, California, added a new Radiation Oncology Medical Director and expanded our payor contracts
- Opened two new de novo clinics in Culver City, California and Polk County, Florida
First Quarter 2022 Results
Consolidated revenue for Q1 2022 was
Revenue for the Patient Services segment was
Gross profit in Q1 2022 was
SG&A expenses in Q1 2022 were
Net income for Q1 2022 was
2022 Outlook
Results for the first quarter of 2022 came in as expected and our outlook for 2022 remains unchanged.
2022 Guidance | |
Revenue | |
Gross Profit | |
Adjusted EBITDA(1) | |
Value-based lives(2) | 1.75 million to 2.0 million lives, representing approximately |
(1) Adjusted EBITDA is a non-GAAP metric. See "Financial Information: Non-GAAP Financial Measures" below. TOI is not reasonably able to provide a reconciliation to net (loss) income due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation, which cannot be done without unreasonable efforts, including uncertainties regarding taxes, share-based compensation and other non-cash items. TOI expects interest expense in the range of
(2) Represents lives under capitation and gain sharing contracts.
Our achievement of the anticipated results is subject to risks and uncertainties, including those disclosed in our filings with the SEC. The outlook does not take into account the impact of any unanticipated developments in the business or changes in the operating environment, nor does it take into account the impact of our acquisitions, dispositions or financings during 2022. Our outlook assumes a largely reopened global market, which would be negatively impacted if closures or other restrictive measures persist or are reimplemented.
Webcast and Conference Call
TOI will host a conference call on Wednesday, May 11, 2022 at 5:00 p.m. (Eastern Time) to discuss first quarter results and management’s outlook for future financial and operational performance.
The conference call can be accessed live over the phone by dialing 1-877-407-0789, or for international callers, 1-201-689-8562. A replay will be available two hours after the call and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the live call and the replay is 13728629. The replay will be available until May 18, 2022.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of TOI's website at https://investors.theoncologyinstitute.com.
About The Oncology Institute, Inc.
Founded in 2007, TOI is advancing oncology by delivering highly specialized, value-based cancer care in the community setting. TOI offers cutting-edge, evidence-based cancer care to a population of approximately 1.5 million patients including clinical trials, stem cell transplants, transfusions, and other care delivery models traditionally associated with the most advanced care delivery organizations. With 80+ employed clinicians and more than 600 teammates in over 50 clinic locations and growing, TOI is changing oncology for the better. For more information visit www.theoncologyinstitute.com.
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “preliminary,” “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “project,” “predict,” “potential,” “guidance,” “approximately,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding projections, anticipated financial results, estimates and forecasts of revenue and other financial and performance metrics and projections of market opportunity and expectations. These statements are based on various assumptions and on the current expectations of TOI and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by anyone as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of TOI. These forward-looking statements are subject to a number of risks and uncertainties, including the accuracy of the assumptions underlying the 2022 outlook discuss herein, the outcome of judicial and administrative proceedings to which TOI may become a party or governmental investigations to which TOI may become subject that could interrupt or limit TOI’s operations, result in adverse judgments, settlements or fines and create negative publicity; changes in TOI’s clients’ preferences, prospects and the competitive conditions prevailing in the healthcare sector; failure to continue to meet stock exchange listing standards; the impact of COVID-19 on the TOI’s business; those factors discussed in the documents of TOI filed, or to be filed, with the SEC, including the Item 1A. "Risk Factors" section of TOI's Annual Report on Form 10-K for the year ended December 31, 2021. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that TOI does not presently know or that TOI currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect TOI’s, plans or forecasts of future events and views as of the date of this press release. TOI anticipates that subsequent events and developments will cause TOI’s assessments to change. TOI does not undertake any obligation to update any of these forward-looking statements. These forward-looking statements should not be relied upon as representing TOI’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Financial Information; Non-GAAP Financial Measures
Some of the financial information and data contained in this press release, such as Adjusted EBITDA, have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). TOI believes that the use of Adjusted EBITDA provides an additional tool to assess operational performance and trends in, and in comparing our financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. TOI’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in TOI's financial statements. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented in this press release in conjunction with TOI’s financial statements and the related notes thereto.
TOI defines Adjusted EBITDA as net (loss) income plus depreciation, amortization, interest, taxes, non-cash items, share-based comp and other adjustments to add-back the following: board fees, consulting and legal fees related to acquisitions, one-time consulting and legal fees related to certain advisory projects, software implementations and debt or equity financings, severance expense and temp labor and recruiting charges to build out our corporate infrastructure. A reconciliation of Adjusted EBITDA to net loss, the most comparable GAAP metric, is set forth below.
Adjusted EBITDA Reconciliation | |||||||||||||||
Three Months Ended March 31, | Change | ||||||||||||||
(dollars in thousands) | 2022 | 2021 | $ | % | |||||||||||
Net income (loss) | $ | 19,286 | $ | (996 | ) | $ | 20,282 | (2,036.3 | )% | ||||||
Depreciation and amortization | 987 | 777 | 210 | 27.0 | % | ||||||||||
Interest expense | 74 | 101 | (27 | ) | (26.7 | )% | |||||||||
Income tax expense | 180 | 218 | (38 | ) | (17.4 | )% | |||||||||
Board and management fees | 45 | 106 | (61 | ) | (57.5 | )% | |||||||||
Non-cash addbacks(1) | 197 | (13 | ) | 210 | (1,615.4 | )% | |||||||||
Share-based compensation | 8,552 | 42 | 8,510 | 20,261.9 | % | ||||||||||
Change in fair value of liabilities | (37,979 | ) | — | (37,979 | ) | N/A | |||||||||
Practice acquisition-related costs(2) | 422 | 90 | 332 | 368.9 | % | ||||||||||
Consulting and legal fees(3) | 655 | 387 | 268 | 69.3 | % | ||||||||||
Other, net(4) | 953 | (643 | ) | 1,596 | (248.2 | )% | |||||||||
Public company transaction costs | 1,444 | — | 1,444 | N/A | |||||||||||
Adjusted EBITDA | $ | (5,184 | ) | $ | 69 | $ | (5,253 | ) | (7,613.0 | )% |
(1) During the three months ended March 31, 2022, non-cash addbacks were primarily comprised of bad debt write-offs of
(2) Practice acquisition-related costs were comprised of consulting and legal fees incurred to perform due diligence, execute, and integrate acquisitions of various oncology practices.
(3) Consulting and legal fees were comprised of a subset of the Company’s total consulting and legal fees during the three months ended March 31, 2022 and 2021, and related to certain advisory projects, software implementations, and legal fees for debt financing and predecessor litigation matters.
(4) Other, net is comprised of severance expenses resulting from cost rationalization programs of
Key Business Metrics | |||
Three Months Ended March 31, | |||
2022 | 2021 | ||
Clinics (1) | 67 | 55 | |
Markets | 11 | 8 | |
Lives under value-based contracts (millions) | 1.5 | 1.2 |
(1) Includes independent oncology practices to which we provide limited management services, but do not bear the operating costs.
Condensed Consolidated Balance Sheets
(in thousands except share data)
March 31, 2022 | December 31, 2021 | ||||||
(Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash (includes restricted cash of | $ | 95,534 | $ | 115,174 | |||
Accounts receivable | 24,513 | 20,007 | |||||
Other receivables | 1,279 | 1,237 | |||||
Inventories, net | 7,770 | 6,438 | |||||
Prepaid expenses | 10,744 | 11,200 | |||||
Total current assets | 139,840 | 154,056 | |||||
Property and equipment, net | 4,909 | 4,192 | |||||
Operating right of use assets | 17,233 | — | |||||
Intangible assets, net | 17,572 | 18,245 | |||||
Goodwill | 26,626 | 26,626 | |||||
Other assets | 332 | 320 | |||||
Total assets | $ | 206,512 | $ | 203,439 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Current portion of operating lease liabilities | $ | 4,277 | $ | — | |||
Current portion of long-term debt | — | 183 | |||||
Accounts payable | 12,596 | 15,559 | |||||
Income taxes payable | 132 | 132 | |||||
Accrued expenses and other current liabilities | 14,516 | 13,924 | |||||
Total current liabilities | 31,521 | 29,798 | |||||
Operating lease liabilities | 14,409 | — | |||||
Derivative warrant liabilities | 3,654 | 2,193 | |||||
Derivative earnout liabilities | 20,578 | 60,018 | |||||
Other non-current liabilities | 3,801 | 6,900 | |||||
Deferred income taxes liability | 551 | 371 | |||||
Total liabilities | 74,514 | 99,280 | |||||
Commitments and contingencies (Note 15) | — | — | |||||
Stockholders’ equity: | |||||||
TOI Common shares, | 7 | 7 | |||||
TOI Convertible Series A Common Equivalent Preferred Shares, | — | — | |||||
Additional paid-in capital | 175,939 | 167,386 | |||||
Accumulated deficit | (43,948 | ) | (63,234 | ) | |||
Total stockholders’ equity | 131,998 | 104,159 | |||||
Total liabilities, cumulative preferred shares and stockholders’ equity | $ | 206,512 | $ | 203,439 |
Condensed Consolidated Statements of Income (Operations) (Unaudited)
(in thousands except share data)
Three Months Ended March 31, | |||||||
2022 | 2021 | ||||||
Revenue | |||||||
Patient services | $ | 35,057 | $ | 29,622 | |||
Dispensary | 18,679 | 17,618 | |||||
Clinical trials & other | 1,425 | 1,340 | |||||
Total operating revenue | 55,161 | 48,580 | |||||
Operating expenses | |||||||
Direct costs – patient services | 27,378 | 23,086 | |||||
Direct costs – dispensary | 15,324 | 15,123 | |||||
Direct costs – clinical trials & other | 137 | 169 | |||||
Selling, general and administrative expense | 29,806 | 11,178 | |||||
Depreciation and amortization | 987 | 777 | |||||
Total operating expenses | 73,632 | 50,333 | |||||
Loss from operations | (18,471 | ) | (1,753 | ) | |||
Other non-operating expense (income) | |||||||
Interest expense | 74 | 101 | |||||
Change in fair value of derivative warrant liabilities | 1,461 | — | |||||
Change in fair value of earnout liabilities | (39,440 | ) | — | ||||
Gain on debt extinguishment | (183 | ) | — | ||||
Other, net | 151 | (1,076 | ) | ||||
Total other non-operating income | (37,937 | ) | (975 | ) | |||
Income before provision for income (loss) taxes | 19,466 | (778 | ) | ||||
Income tax (expense) benefit | (180 | ) | (218 | ) | |||
Net income (loss) | $ | 19,286 | $ | (996 | ) | ||
Net income (loss) per share attributable to common stockholders: | |||||||
Basic | $ | 0.22 | $ | (0.02 | ) | ||
Diluted | $ | 0.21 | $ | (0.02 | ) | ||
Weighted-average number of shares outstanding: | |||||||
Basic | 73,252,365 | 62,853,419 | |||||
Diluted | 76,247,966 | 62,853,419 |
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
Three Months Ended March 31, | |||||||
2022 | 2021 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 19,286 | $ | (996 | ) | ||
Adjustments to reconcile net loss to cash (used in) provided by operating activities: | |||||||
Depreciation and amortization | 987 | 777 | |||||
Amortization of debt issuance costs | — | 18 | |||||
Share-based compensation | 8,553 | 42 | |||||
Increase in fair value of liability classified warrants | 1,461 | — | |||||
Decrease in fair value of liability classified earnouts | (39,440 | ) | — | ||||
Deferred taxes | 180 | 221 | |||||
Gain on debt extinguishment | (183 | ) | — | ||||
Bad debt expense | 154 | — | |||||
Loss on disposal of property and equipment | 14 | — | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (4,660 | ) | (550 | ) | |||
Inventories | (1,332 | ) | 10 | ||||
Other receivables | (42 | ) | (20 | ) | |||
Prepaid expenses | 456 | 56 | |||||
Other current assets | — | (353 | ) | ||||
Operating lease right-of-use assets | 942 | — | |||||
Other assets | (11 | ) | (37 | ) | |||
Accrued expenses and other current liabilities | 526 | 358 | |||||
Income taxes payable | — | 102 | |||||
Accounts payable | (2,963 | ) | 474 | ||||
Current and long-term operating lease liabilities | (909 | ) | — | ||||
Other non-current liabilities | — | 362 | |||||
Net cash and restricted cash (used in) provided by operating activities | (16,981 | ) | 464 | ||||
Cash flows from investing activities: | |||||||
Purchases of property and equipment | (1,002 | ) | (619 | ) | |||
Cash paid for practice acquisitions, net | — | (827 | ) | ||||
Net cash and restricted cash used in investing activities | (1,002 | ) | (1,446 | ) | |||
Cash flows from financing activities: | |||||||
Advances from line of credit | — | 2,500 | |||||
Payments made for financing of insurance payments | (1,235 | ) | — | ||||
Payment of deferred consideration liability for acquisition | (409 | ) | — | ||||
Principal payments on long-term debt | — | (94 | ) | ||||
Principal payments on financing leases | (13 | ) | (10 | ) | |||
Issuance of Legacy TOI preferred stock | — | 20,000 | |||||
Net cash and restricted cash (used in) provided by financing activities | (1,657 | ) | 22,396 | ||||
Net (decrease) increase in cash and restricted cash | (19,640 | ) | 21,414 | ||||
Cash and restricted cash at beginning of period | 115,174 | 5,998 | |||||
Cash and restricted cash at end of period | $ | 95,534 | $ | 27,412 | |||
Supplemental disclosure of cash flow information: | |||||||
Interest and principal forgiven from Paycheck Protection Program loans | $ | 183 | $ | — | |||
Cash paid for: | |||||||
Income taxes | $ | — | $ | 4 | |||
Interest | $ | 74 | $ | — |
Contacts
Media
The Oncology Institute, Inc.
Julie Korinke
juliekorinke@theoncologyinstitute.com
(562) 735-3226 x 88806
Revive
Michael Petrone
mpetrone@reviveagency.com
(615) 760-4542
Investors
Solebury Trout
investors@theoncologyinstitute.com
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