RXMD = Showing some strength after November 15, 2019, earnings report. “Q3 set new records across basically all metrics,” commented S. Parikh Mars, Progressive Care CEO. “We saw accelerating growth in sales and prescriptions while continuing our strong multi-quarter trends of falling costs and expanding gross margins. Beyond the numbers, we are seeing a major positive impact from our recent Family Physicians Rx acquisition, and the Company is firing on all cylinders post-integration. Ultimately, this creates a very favorable backdrop for continued aggressive expansion in the months and quarters ahead as we prepare to launch several powerful new initiatives in Q4 and 2020.”
Third Quarter 2019 Financial Highlights
- Consolidated quarterly year-over-year Revenue Growth of 91% to $10.14 million
- Q3 Gross Margins expanded to 24.4% (versus Q2 22.7%, Q1 19.8%)
- Gross Profit up 128% year-over-year to $2.47 million
- Prescriptions Filled up 52% to 323k for nine months ended Sep. 30 (vs 2018 comparable period)
- Prescriptions Filled up 70% to 136k in Q3, on quarterly year-over-year basis
- Cash level up 774% year-to-date to $759,016
- Accounts Receivable up 96% year-to-date to $2,372,177
Third Quarter 2019 Business Highlights
- Achieved record performance in Q3 driven by expanding operations, targeting higher margin strategies, and M&A
- Renegotiated Family Physicians Rx (FPRX) acquisition, reducing price by 36%, saving shareholders $1.1 million
- FPRX renegotiation generates $400k reduction in existing and outstanding liabilities and significant reduction in outstanding shares (10 million)
- Realized Maximum benefits at 3 of 4 locations in Q3
- Expects to begin shipping proprietary branded CBD-based products by January 2020
- Anticipates SEC filing by April 2020 as prefatory step to planned major US exchange listing
- Plans transformative expansion into Telehealth marketplace with disruptive monetization model in 2020
- Management discussed the breakout quarter in an in-depth conference call, a replay of which can be found here.
Conference Call Highlights
In addition to comprehensively covering the record-breaking financial performance metrics for the quarter ended September 30, the Company also discussed the impact of its recent FPRX acquisition, the driving forces behind the recent trend in expanding gross margins, a planned move to full SEC reporting status leading to an uplisting of shares onto a major US exchange, and its transformative vision for 2020.
The Company noted that the FPRX acquisition and PharmcoRx growth is driving material positive impact on balance sheet metrics, with positive cash flows now translating into additional ammunition for continued high-ROI investments. FPRX integration is also significantly boosting accounts receivable. The Company expects this dynamic to continue to significantly drive positive balance sheet effects in Q4 results.
The Company also discussed consolidation of physical locations and relocation of corporate offices, which will contribute to additional bottom line gains over time, including a $300k reduction in costs through lease savings that will appear in Q1 2021 results.
The Company also discussed its vision for the future, and noted that a dramatic realignment toward a scalable model with national reach is in progress, including a transformation from a pharmacy model to a comprehensive health services model that includes significant expansion in products and services, including RXMD Therapeutics branded products in the CBD and nutraceutical space, as well as a defining expansion into the Telehealth marketplace.
The Company believes its vision for monetization in telemedicine has the potential to be disruptive in the healthcare space, and will have powerful synergies with its existing legacy pharmacy business and its emerging RXMD Therapeutics. The opportunity to capitalize on its in-house expertise to expand through disruptive technology while providing needed care and services to underserved populations is a powerful step that will drive shareholder value while achieving a tremendous positive social impact. Targeting a leadership position in this market will be a signature objective for the Company in 2020.
“Get ready for a transformation,” continued Mars. “We are extremely excited about the opportunity to monetize telemedicine in a manner that will truly change the game as it is currently played. We look forward to introducing current and prospective shareholders to this vision in the months ahead. 2019 has been a breakout year. But the core message that we have right now for our shareholders is this: expect a transformative evolutionary leap to a vastly more scalable, diversified, and higher margin Progressive Care in 2020 and beyond.”
FELPU = Showing some strength after reporting earnings on November 12, 2019. Foresight Energy reported financial and operating results for the third quarter ended September 30, 2019. Foresight generated third quarter coal sales revenues of $181.5 million on sales volumes of 4.7 million tons, resulting in a net loss of $34.1 million, and Adjusted EBITDA of $46.9 million. Our mines safely and efficiently produced nearly 5.0 million tons during the quarter.
During the quarter, the Partnership commenced discussions with its creditor constituencies to explore potential restructuring alternatives. Refer to our recent Current Reports on Form 8-K for further discussions of our restructuring efforts and related matters.
On November 12, 2019, we reached a resolution with our insurers regarding the remaining recoveries under our policies related to the Hillsboro Combustion Event. In consideration for the resolution of all claims, we expect to receive a final payment of $25.4 million. The final payment is expected to be recognized in the consolidated statement of operations in the fourth quarter of 2019 and is in addition to the $91.0 million of recoveries received in previous years related to the Partnership’s mitigation costs, losses on machinery and equipment, and business interruption costs arising from the Hillsboro Combustion Event
“The impact of depressed demand and pricing in both domestic and international markets has impacted us significantly in recent months,” remarked Mr. Robert D. Moore, Chairman, President, and Chief Executive Officer. “As a result, we are revising our financial and operating guidance for 2019, and we are actively exploring potential restructuring alternatives that would provide for an improved cash flow profile necessary to manage the current headwinds being encountered.”
Third Quarter Consolidated Financial Results
Coal sales totaled $181.5 million for the third quarter 2019 compared to nearly $292.0 million for the third quarter 2018, representing a decrease of $110.5 million, or 37.9%. The decrease in coal sales revenue from the prior year period was due to lower coal sales volumes combined with lower coal sales realization per ton sold. Coal sales volumes for the three months ended September 30, 2019 were lower as compared to the prior year period due primarily to lower sales volumes placed into the export market. Declining API2 pricing on export volumes resulted in lower overall coal sales realizations.
Cost of coal produced was $93.7 million for the third quarter 2019 compared to $133.7 million for the third quarter 2018. The decrease in cost of coal produced from the prior year period was due to an overall decrease in produced tons sold and a decrease in the cash cost per ton sold. The decrease in cash cost per ton sold was primarily due to efforts to further contain mine supplies expenses owing to the current financial condition of the Partnership.
Transportation costs decreased approximately $27.1 million from the third quarter 2018 to the third quarter 2019 because of a decrease in produced tons sold and a larger percentage of our sales going to the export market during the prior year period, which have higher associated transportation and transloading costs.
The decrease in selling, general and administrative expense during the third quarter 2019 was primarily due to decreased sales and marketing expenses resulting from lower export sales volumes and legal expenses incurred in the prior year period associated with the Hillsboro and Macoupin litigation matters settled in October of 2018.
Interest expense during the third quarter 2019 was comparable to the three months ended September 30, 2018 primarily as a result of lower overall outstanding principal balances on our Term Loan due 2022 and longwall financing arrangements, offset by additional outstanding borrowings on our revolving credit facility.
Debt restructuring costs of $1.2 million consist of legal and financial advisor fees related to our efforts to restructure our business for the long term.
Adjusted EBITDA was $46.9 million for the third quarter 2019 compared to $57.6 million for the third quarter 2018. The decrease in Adjusted EBITDA was due to overall decreased sales volumes and lower coal sales realization per ton in the current year period.
During the third quarter 2019, Foresight generated $22.4 million in cash flows from operations and ended the quarter with over $42 million in cash on hand. Capital expenditures for the third quarter 2019 totaled $18.8 million compared to $18.6 million for the third quarter 2018. Cash provided from financing activities in the third quarter 2019 was $34.9 million, consisting of additional borrowings on our revolving credit facility offset by $6.2 million in payments related to the final installment on our longwall financing arrangement and regularly scheduled payments on our finance lease obligations.
Guidance for 2019
Based on Foresight’s contracted position, recent performance, and its current outlook on pricing and the coal markets in general, the Partnership is updating the following guidance for the remainder of 2019:
Sales Volumes – Based on current committed position and expectations for the remainder of 2019, Foresight is projecting sales volumes to be between 19.5 and 20.5 million tons, with approximately 6.0 million tons expected to be sold into the international market.
Adjusted EBITDA – Based on the projected sales volumes and operating cost structure, Foresight currently expects to generate Adjusted EBITDA in a range of $190 to $210 million, which includes $25.4 million of insurance recoveries expected to be recognized and received in the fourth quarter 2019.
Capital Expenditures – Total 2019 capital expenditures are estimated to be between $83 and $90 million.