Progressive Care Inc. Announces Record Full Year 2023 Results with Revenues of $49.7 Million, an Increase of 22% with Annual Gross Margins of 30%
- Record annual revenues of $49.7 million for 2023, a 22% increase from 2022.
- 17% increase in pharmacy prescription revenue and 136% growth in 340B contract services revenue.
- Gross profit margin increased to 30% in 2023.
- Cash balance as of December 31, 2023, approximately $7.9 million, up from $6.7 million in 2022.
- Non-cash goodwill impairment charge of $13.9 million in 2023.
- Net loss of $19.4 million in 2023, compared to $5.9 million in 2022.
- Loss from operations increased by approximately $11.4 million in 2023.
- Increase in operating expenses of approximately $16.9 million in 2023.
- Net loss increased primarily due to goodwill impairment recognized in 2023.
- Decrease in COVID-19 testing revenue of approximately $1.9 million in 2023.
The reported revenue growth for Progressive Care Inc. is a robust indicator of the company's expanding market presence, particularly in pharmacy prescription and 340B contract services. The 22% increase in total revenues is a substantial uptick, reflecting the company's strategic initiatives and possibly improved market conditions. The reported 136% growth in 340B contract services revenue is especially noteworthy, as it suggests the company has effectively capitalized on the 340B drug pricing program, which allows hospitals and clinics serving underserved populations to obtain discounted medications.
However, the significant goodwill impairment charge of approximately $13.9 million raises concerns about the overvaluation of assets in the past and may indicate integration challenges following the change in control transaction with NextPlat Corp. While goodwill impairments are non-cash charges and do not affect liquidity, they can impact investor perception and the company's book value. The increase in the cash balance is a positive sign, indicating liquidity to support operations and potential investments. Yet, stakeholders should consider the implications of the reported net loss, which has substantially increased from the previous year, largely due to the goodwill impairment.
The impressive growth in pharmacy prescription revenue by 17% reflects Progressive Care's successful efforts in expanding its pharmacy operations. The company's focus on specialized care and patient medical adherence could be contributing to increased customer loyalty and prescription volume. This is indicative of a competitive advantage in the pharmacy sector, where customer service and adherence programs can differentiate a provider.
Moreover, the expansion of services through partnerships, such as the one with Mark Cuban Cost Plus Drug Company, suggests a strategic move to offer cost-effective drug options, which can be appealing in a price-sensitive market. The addition of OTC benefit programs aligns with current trends in the pharmacy industry to increase convenience and access to healthcare products, potentially driving foot traffic and cross-selling opportunities. The increased gross profit margin to 30% is a positive sign of operational efficiency and may reflect a favorable shift in the sales mix towards higher-margin services.
The strategic emphasis on the 340B program positions Progressive Care in a niche market with regulatory support aimed at providing affordable medication to underserved communities. The growth in this area not only enhances the company's revenue streams but also aligns with broader healthcare industry trends focused on cost containment and value-based care. The increase in the number of prescriptions filled, albeit modest, indicates steady demand for the company's services.
However, the reported net loss, exacerbated by the goodwill impairment, is a red flag that warrants careful assessment of the company's valuation and future earnings potential. The consolidation of Progressive Care as a subsidiary of NextPlat post-acquisition may offer strategic benefits and resource sharing but also introduces complexity in financial reporting and potential risks associated with integrating operations and corporate cultures.
Results Driven by
"Progressive Care's significant growth in 2023 reflects its continuing commitment to ensuring strong patient medical adherence through highly specialized care and its proven ability to support the unique needs of 340B covered entities. I am pleased with our team's success in greatly strengthening the Company's financial foundation and driving improved operational performance. We continue to seek opportunities to expand our pharmacy operations with new programs, such as the OTC benefit programs announced last year, and add additional clients within the 340B space," said Charles M. Fernandez, Chairman and CEO of Progressive Care Inc.
2023 Annual Financial Highlights
- Total revenues increased by approximately
$9.1 million 22% , to approximately$49.7 million $40.6 million 18% over revenue reported for the third quarter of 2023. - Prescription revenue, net of PBM fees, increased by approximately
$5.8 million 17% , to approximately$40.7 million $34.9 million - 340B contract revenue increased to approximately
$9.0 million $5.2 million 136% , compared to approximately$3.8 million - Annual gross profit margin increased to approximately
30% in 2023, from approximately24% in 2022. - Fiscal 2023 results include a non-cash goodwill impairment charge of approximately
$13.9 million 48% of the total amount of goodwill and other intangible assets, net that were recognized in the change in control transaction with NextPlat Corp in July 2023. - Cash balance as of December 31, 2023, was approximately
$7.9 million $6.7 million $0.9 million
Organizational Highlights and Recent Business Developments
- PharmcoRx added several additional 340B contracts during fiscal 2023 as it continues to support the unique needs of 340B covered entities. For the year ended December 31, 2023, approximately
$0.8 million $5.2 million $4.4 million - Furthering its commitment to improving community access to valuable healthcare services, through partnerships with ProHealth Connect and NationsBenefits announced late in 2023, the Company began offering additional products and services for new and existing Medicare Advantage patients whose wish is to utilize their OTC benefits to purchase over-the-counter products at its PharmcoRx pharmacies. The Company also expanded its in-pharmacy offerings through an agreement with the Mark Cuban Cost Plus Drug Company ("Cost Plus Drugs"). The Cost Plus Drugs program allows participating patients the ability to purchase generic and branded medicines at cost plus a low fixed markup.
- On June 30, 2023, NextPlat Corp (NASDAQ: NXPL, NXPLW) ("NextPlat"), Charles M. Fernandez, Chairman and Chief Executive Officer of the Company, and Rodney Barreto, Vice-Chairman of the Company, exercised their common stock purchase warrants in Progressive Care and collectively owned
53% of Progressive Care's voting common stock. As such, this constituted a change in control in Progressive Care and effective as of July 1, 2023, it is now a consolidated subsidiary of NextPlat for accounting purposes.
Mr. Fernandez concluded, "Looking ahead, our plans for Progressive Care remain focused on further supporting its growth in the large 340B and long-term care markets, as well as its ability to continue providing high quality, specialized offerings and services for our pharmacy customers. Our team is confident in the long-term value of Progressive Care and are committed to actively exploring every opportunity to best unlock its potential to the benefit of our patients, providers, and our shareholders."
Summary Financials for the Years Ended December 31, 2023 and 2022
Our results of operations as reported in our consolidated financial statements for the periods six months ended December 31, 2023 ("Successor"), six months ended June 30, 2023 ("Predecessor"), and the year ended December 31, 2022 ("Predecessor") are in accordance with accounting principles generally accepted in
Successor | Predecessor | Predecessor | ||||||||||||||||||||||
Six Months | Six Months | Year Ended | Year Ended | $ Change | % Change | |||||||||||||||||||
Total revenues, net | $ | 26,779 | $ | 22,948 | $ | 49,727 | $ | 40,602 | $ | 9,125 | 22 | % | ||||||||||||
Total cost of revenue | 18,323 | 16,242 | 34,565 | 30,899 | 3,666 | 12 | % | |||||||||||||||||
Total gross profit | 8,456 | 6,706 | 15,162 | 9,703 | 5,459 | 56 | % | |||||||||||||||||
Operating expenses | 23,114 | 6,067 | 29,181 | 12,282 | 16,899 | 138 | % | |||||||||||||||||
(Loss) income from operations | (14,658) | 639 | (14,019) | (2,579) | (11,440) | 444 | % | |||||||||||||||||
Other income (expense) | 10 | (5,406) | (5,396) | (3,324) | (2,072) | 62 | % | |||||||||||||||||
Loss before income taxes | (14,648) | (4,767) | (19,415) | (5,903) | (13,512) | 229 | % | |||||||||||||||||
Provision for income taxes | — | — | — | (1) | 1 | (100) | % | |||||||||||||||||
Net loss | (14,648) | (4,767) | (19,415) | (5,904) | (13,511) | 229 | % | |||||||||||||||||
Series A Preferred Stock dividend associated | — | — | — | (541) | 541 | (100) | % | |||||||||||||||||
Net loss attributable to common shareholders | $ | (14,648) | $ | (4,767) | $ | (19,415) | $ | (6,445) | $ | (12,970) | 201 | % | ||||||||||||
Financial Results for the Year Ended December 31, 2023
For the years ended December 31, 2023 and 2022, we recognized overall revenue from operations of approximately
We have filled approximately 489,000 and 463,000 prescriptions during the years ended December 31, 2023 and 2022, respectively, a
Gross profit margins increased from
Loss from operations increased by approximately
Net Loss
We had a net loss of approximately
Annual Report on Form 10-K Available
The Company's Annual Report on Form 10-K, available at www.sec.gov and on the Company's website, contains a thorough review of its financial results for the year ended December 31, 2023.
About Progressive Care
Progressive Care Inc. (OTCQB: RXMD) through its subsidiaries, is a
Forward-Looking Statements
Forward-Looking Statements contained herein that are not based upon current or historical fact are forward-looking in nature and constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements reflect the Company's expectations about its future operating results, performance, and opportunities that involve substantial risks and uncertainties. When used herein, the words "anticipate," "believe," "estimate," "upcoming," "plan," "target," "intend" and "expect" and similar expressions, as they relate to Progressive Care Inc., its subsidiaries, or its management, are intended to identify such forward-looking statements. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties, and other factors discussed in our Annual Report on Form 10-K and other SEC filings that could cause the Company's actual results, performance, prospects, and opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. You should not rely on these forward-looking statements, as actual outcomes and results may differ materially from those expressed or implied in the forward-looking statements as a result of such risks and uncertainties. All forward-looking statements in this press release are based on management's beliefs and assumptions and on information currently available to Progressive Care, and Progressive Care does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made.
Investor Contact for Progressive Care
Michael Glickman
MWGCO, Inc.
917-397-2272
mike@mwgco.net
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SOURCE Progressive Care, Inc.
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