Record Quarter Highlighted by a $9.6 Million Increase in ARR, an Expansion in
Gross Margin to 43.5%, and the Addition of iCBT to Our Partnership
with Canada Life
MONTREAL, March 23, 2022 /CNW Telbec/ - Dialogue
Health Technologies Inc. (TSX: CARE) ("Dialogue" or the
"Company"), Canada's premier
health and wellness virtual healthcare platform, announced today
its financial and operational results for the three months and year
ended December 31, 2021. Financial
references are in Canadian dollars unless otherwise indicated.
"2021 was a pivotal year for Dialogue as we made our entry on
the Toronto Stock Exchange. Even more notably, we delivered strong
growth, launched our Integrated Health PlatformTM,
strengthened our offering with the addition of internet-based
cognitive behavioural therapy, and expanded our largest
partnerships," said Cherif Habib, Chief Executive Officer of
Dialogue. "As we enter 2022, we are excited about the opportunity
to take advantage of our growing scale, competitive moats, and
market awareness to establish Dialogue as the leading,
fully-integrated virtual health and wellness platform in
Canada and beyond."
Navaid Mansuri, Chief Financial
Officer, added: "We are pleased with our record fourth quarter
performance, as we demonstrated excellent revenue growth and
continued business efficiencies, ending 2021 on a high note. Our
business model is scaling, and we saw sustained momentum across our
key operating metrics. Our IPO has allowed us to strengthen our
balance sheet, positioning us well to make purposeful acquisitions
to enhance our offering. We will continue executing on our strategy
as we focus on the large, long-term growth opportunity ahead of
us."
Q4 2021 Financial Highlights
(All capitalized terms not defined herein, shall have
the meaning and usefulness ascribed to them in the Management's
Discussion and Analysis for the three months and year ended
December 31, 2021 Comparison periods
in each case are the three months and year ended December 31, 2020, unless otherwise
stated)
- Annual Recurring and Reoccurring Revenue ("ARR") grew 45.2%
year-over-year to $85.0 million,
driven by new Customer wins, which include a national retailer of
general merchandise, a national home improvement company, a global
IT and business consulting services firm, and a large Canadian
labour union, as well as program expansions and the addition of new
services by existing Customers.
- Fourth quarter revenue increased by 40.6% year-over-year to
$18.9 million, due to growth in
Members, both Direct and from agreements with strategic
distribution partners, and an increase in the Attach Rate as
existing Customers add more services over time.
- Members grew to more than 1.8 million, an increase of more than
900,000, or 98.0%, year-over-year, and approximately 82,000, or
4.7%, compared to the third quarter of 2021. Many signed customers
chose to launch our platform at the start of 2022, subsequent to
quarter end, to account for budgetary and financial planning
requirements. As such, we onboarded an additional 100,000 members
in the first week of 2022. When factoring the timing of these
additions, Members grew approximately 182,000, or 10.3%, compared
to the third quarter of 2021.
- Attach Rate grew to 1.50 from 1.07 in the same period last
year, mainly due to the addition of our internet-based cognitive
and behavioural therapy ("iCBT") service to The Canada Life
Assurance Company's ("Canada Life") Consult+ platform.
- Member-Service Units, which we define as total Members
multiplied by the Attach Rate, rose 177.6% year-over-year to just
under 2.8 million from approximately 1.0 million in the same period
last year. This meaningful increase demonstrates the success of
Dialogue's land and expand strategy, as both existing and new
Customers continue to leverage our Integrated Health
PlatformTM.
- 56% of new direct Members signed up for two services or more in
the fourth quarter of 2021. Combined with current Customer
expansions, the cumulative number of direct Members with two or
more services is now 21%, compared to 14% at the same time last
year and 17% at the end of the third quarter of 2021.
- Average Monthly Net Retention Rate ("NRR") was 102% for the
fourth quarter of 2021, marking another quarter of NRR greater than
100%, with no member churn within our mid-market and enterprise
customer categories.
- Gross Margin increased to 43.5%, compared to 34.8% in the
fourth quarter of 2020, as the lower margin profile at Optima was
more than offset by a favourable utilization rate and by greater
scale year-over-year in both our Mental Health service and Employee
Assistance Program ("EAP").
- Adjusted EBITDA1 loss was $5.7 million, compared to a net loss of
$5.2 million in the same period last
year. The loss was due mainly to higher operating expenses
year-over-year to support our growth, to launch and promote new
services, to develop our technology platform, and to sustain a
public company structure, partially offset by higher gross
profit.
- Net loss was $7.1 million, as
compared to $6.6 million in the same
period last year, due mainly to higher operating expenses,
partially offset by higher gross profit.
- Cash and Cash Equivalents were $104.3
million as of December 31,
2021, compared to $42.1
million as of December 31,
2020. The increase was the result of net proceeds from the
initial public offering of $90.6
million, offset in part by cash used in operations during
the year.
Q4 2021 Business Highlights
- Building on the launch of our iCBT service in Q3, we developed
an enhanced option, iCBT Plus, with guidance from a coach, allowing
clients and members to select their desired level of support and
autonomy to improve mental health.
- We rolled out three new self-care toolkits in November within
our iCBT program to provide members with an even more robust
coverage. In addition to the original modules for managing
Depression and Anxiety, eligible Dialogue members can now access
toolkits for Social Anxiety, Divorce & Separation, and Loss
& Bereavement.
- On December 1, 2021, we received
a meaningful vote of confidence from our largest partner, Sun Life
Assurance Company of Canada ("Sun
Life"), which increased its investment in Dialogue by acquiring
approximately 6 million shares in a private agreement with certain
third parties. We did not receive any proceeds from this
transaction.
- On December 2, 2021, we announced
an agreement with Canada Life to make our iCBT program available to
all Consult+ users across Canada,
expanding on its existing Primary Care offering and demonstrating
the appeal of our Integrated Health PlatformTM.
- Subsequent to quarter end, on January
11, 2022, we published our 2nd annual Canadian Attitudes on
Health and Virtual Care Report, a joint study with Environics
Research. Key findings indicate that 82% of working Canadians agree
that employers should provide virtual care services through their
benefit plans, and nearly 40% plan to use their employee benefits
to help them reach their health and wellness objectives.
- Subsequent to quarter end, on February
9, 2022, we announced an expanded partnership with Sun Life,
whereby both our EAP and iCBT services would be added to the Lumino
Health Virtual Care platform effective June
1, 2022.
- We added Jennifer Buckley to our
leadership team as Senior Vice President, Commercial. She most
recently held the role of Vice President of Sales and Country
Manager for Canada with
Workday.
- We have been ranked #8 on Deloitte's 2021 Canada Technology
Fast 50, a program that celebrates the world-class achievements and
the evolution of the Canadian technology sector, with a three-year
revenue growth of 4,215%
Upcoming events
- Laurentian Bank Securities 9th Annual Institutional
Investor Conference on April 7,
2022.
- RBC Capital Markets 2022 Global Healthcare Conference in
New York City on May 17-18, 2022.
- CIBC Capital Markets Technology and Innovation Conference 10.0
in Toronto on May 25-26, 2022.
- National Bank Financial 12th Annual Quebec
Conference in Toronto on
June 9, 2022.
Notice of Conference Call
Dialogue will host a live video webinar on Wednesday,
March 23, 2022 at 9:00 a.m. ET
to discuss its financial results. Cherif Habib, CEO, and
Navaid Mansuri, CFO, will co-chair
the call. All interested parties can join the event at the
following link, which is also available in the Events and
Presentations section of the Company's website. The presentation
will be accompanied by slides, which will be available on the
screen view and will be made available prior to the start of the
webinar on the Company's website. Please connect at least 15
minutes prior to the event to ensure adequate time for any software
download of Zoom that may be required to attend the event.
Listeners that prefer to dial in by phone may do so by accessing
the same web link and the dial in details will be provided by email
upon registration.
Non-International Financial Reporting Standards ("IFRS")
Financial Measures
This press release makes reference to certain non-IFRS measures,
such as "EBIT" represents net profit or loss before net
financing (income) expenses and income taxes, "EBITDA"
(which stands for net profit or loss before net financing (income)
expenses, income taxes, depreciation of property and equipment,
amortization of intangible assets, and amortization of right-of-use
assets) and "Adjusted EBITDA" (which stands for net
profit or loss before net financing (income) expenses, income
taxes, depreciation of property and equipment, amortization of
intangible assets, amortization of right-of-use assets, transaction
costs, acquisition costs, change in fair value of conversion
feature, share-based payments expense, change in fair value of
contingent consideration, severance costs, and foreign exchange
gain or loss). These measures are not recognized under IFRS and do
not have a standardized meaning prescribed by IFRS and are
therefore unlikely to be comparable to similar measures presented
by other companies. Rather, these measures are provided as
additional information to complement those IFRS measures by
providing further understanding of our results of operations from
management's perspective. Accordingly, these measures should not be
considered in isolation nor as a substitute for analysis of our
financial information as reported under IFRS. Management also
believes that other users, such as securities analysts, investors
and other interested parties, frequently use non-IFRS measures,
particularly in the evaluation of issuers.
Management also uses non-IFRS measures in order to facilitate
operating performance comparisons from period to period, to prepare
annual operating budgets and forecasts and to determine components
of management compensation. Where applicable, we provide a clear
quantitative reconciliation from the non-IFRS financial measures to
the most directly comparable measure calculated in accordance with
IFRS.
The following table reconciles net loss to Adjusted EBITDA loss
for the three months and years ended December 31, 2021 and 2020:
DIALOGUE HEALTH
TECHNOLOGIES INC. ADJUSTED EBITDA FOR THE THREE
MONTHS AND YEARS ENDED DECEMBER 31, 2021 and 2020
|
|
(in thousands of
CAD)
|
|
Three months
ended
December
31,
|
|
Year
ended
December
31,
|
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(7,142)
|
|
(6,565)
|
|
(251,352)
|
|
(20,904)
|
Net financing
(income)
expenses
|
|
(207)
|
|
219
|
|
(362)
|
|
714
|
Current income tax
expense
|
|
36
|
|
—
|
|
70
|
|
—
|
Deferred income tax
recovery
|
|
(114)
|
|
(229)
|
|
(393)
|
|
(229)
|
EBIT
|
|
(7,427)
|
|
(6,575)
|
|
(252,037)
|
|
(20,419)
|
Depreciation of
property and
equipment
|
|
172
|
|
140
|
|
519
|
|
676
|
Amortization of
intangible
assets
|
|
377
|
|
447
|
|
1,502
|
|
740
|
Amortization of
right-of-use
assets
|
|
152
|
|
134
|
|
600
|
|
505
|
EBITDA
|
|
(6,726)
|
|
(5,854)
|
|
(249,416)
|
|
(18,498)
|
Share-based payments
expense
|
|
677
|
|
383
|
|
2,061
|
|
966
|
Acquisition
costs
|
|
150
|
|
350
|
|
380
|
|
590
|
Change in fair value
of
conversion feature
|
|
—
|
|
(104)
|
|
225,417
|
|
(381)
|
Fair value of
contingent liability
|
|
193
|
|
—
|
|
193
|
|
—
|
Severance
|
|
37
|
|
—
|
|
37
|
|
—
|
Foreign exchange loss
(gain)
|
|
—
|
|
—
|
|
87
|
|
—
|
Adjusted
EBITDA
|
|
(5,669)
|
|
(5,225)
|
|
(21,241)
|
|
(17,323)
|
About Dialogue
Incorporated in 2016, Dialogue is Canada's premier virtual healthcare and
wellness platform, providing affordable, on-demand access to
quality care. Through our team of health professionals, we serve
employers and organizations who have an interest in the health and
well-being of their employees, members and their families. Our
Integrated Health Platform™ is a one-stop healthcare hub that
centralizes all of our programs in a single, user-friendly
application, providing access to services 24 hours per day,
365 days per year from the convenience of a smartphone, computer or
tablet.
Forward-Looking Information
This release includes "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking
statements") within the meaning of applicable securities laws.
Forward-looking information may relate to our financial outlook
(including revenues and Adjusted EBITDA), and anticipated events or
results and may include information regarding our financial
position, business strategy, growth strategies, addressable
markets, budgets, operations, financial results, taxes, dividend
policy, plans and objectives.
In some cases, but not necessarily in all cases, forward-looking
statements can be identified by the use of forward-looking
terminology such as "plans" "targets", "expects" or "does not
expect", "is expected", "an opportunity exists", "is positioned",
"estimates", "intends", "assumes", "anticipates" or "does not
anticipate" or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might", "will" or "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances contain forward-looking statements. Forward-looking
statements are not historical facts, nor guarantees or assurances
of future performance but instead represent management's current
beliefs, expectations, estimates and projections regarding future
events and operating performance.
Forward-looking statements are necessarily based on a number of
opinions, assumptions and estimates that, while considered
reasonable by Dialogue as of the date of this release, are subject
to inherent uncertainties, risks and changes in circumstances that
may differ materially from those contemplated by the
forward-looking statements. Important factors that could cause
actual results to differ, possibly materially, from those indicated
by the forward-looking statements include, but are not limited to,
the risk factors identified under "Risk Factors" in the Company's
latest annual information form, and in other periodic filings that
the Company has made and may make in the future with the securities
commissions or similar regulatory authorities in Canada, all of which are available under the
Company's SEDAR profile at www.sedar.com. These factors are not
intended to represent a complete list of the factors that could
affect Dialogue. However, such risk factors should be considered
carefully. There can be no assurance that such estimates and
assumptions will prove to be correct. You should not place undue
reliance on forward-looking statements, which speak only as of the
date of this release. Dialogue undertakes no obligation to publicly
update any forward-looking statement, except as required by
applicable securities laws.
Although we have attempted to identify important risk factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other risk
factors not currently known to us or that we currently believe are
not material that could also cause actual results or future events
to differ materially from those expressed in such forward-looking
information. There can be no assurance that such information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information.
Accordingly, you should not place undue reliance on forward-looking
information. The forward-looking information represents our
expectations as of the date of this earnings release (or as the
date it is otherwise stated to be made) and is subject to change
after such date. However, we disclaim any intention or obligation
or undertaking to update or revise any forward-looking information
whether as a result of new information, future events or otherwise,
except as required under applicable Canadian securities laws. All
of the forward-looking information contained in this earnings
release is expressly qualified by the foregoing cautionary
statements.
DIALOGUE HEALTH
TECHNOLOGIES INC.
|
|
CONSOLIDATED
STATEMENT OF NET LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
|
|
|
Three months
ended
December
31,
|
|
Year
ended
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
|
|
|
|
|
Revenue
|
18,916,275
|
|
13,450,370
|
|
68,049,313
|
|
35,801,572
|
Cost of
services
|
10,693,090
|
|
8,774,648
|
|
39,242,644
|
|
21,408,622
|
Gross
profit
|
8,223,185
|
|
4,675,722
|
|
28,806,669
|
|
14,392,950
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
General and
administrative
|
8,362,041
|
|
6,679,882
|
|
32,149,578
|
|
20,078,952
|
Sales and
marketing
|
3,363,330
|
|
2,859,778
|
|
11,700,157
|
|
9,432,924
|
Product and
development
|
3,248,270
|
|
1,430,930
|
|
9,515,466
|
|
4,715,248
|
Share-based payments
expense
|
676,741
|
|
382,701
|
|
2,060,636
|
|
966,206
|
|
15,650,382
|
|
11,353,291
|
|
55,425,837
|
|
35,193,330
|
|
|
|
|
|
|
|
|
Operating
loss
|
(7,427,197)
|
|
(6,677,569)
|
|
(26,619,168)
|
|
(20,800,380)
|
|
|
|
|
|
|
|
|
Other
expenses
|
|
|
|
|
|
|
|
Change in fair value
of conversion
feature
|
—
|
|
(103,610)
|
|
225,416,590
|
|
(380,526)
|
Net financing
(income) expenses
|
(207,085)
|
|
219,218
|
|
(362,138)
|
|
713,897
|
|
(207,085)
|
|
115,608
|
|
225,054,452
|
|
333,371
|
|
|
|
|
|
|
|
|
Net loss before
income taxes
|
(7,220,112)
|
|
(6,793,177)
|
|
(251,673,620)
|
|
(21,133,751)
|
Current income tax
(expense)
|
(35,552)
|
|
—
|
|
(70,466)
|
|
—
|
Deferred income tax
recovery
|
113,968
|
|
229,241
|
|
392,698
|
|
229,241
|
Net
loss
|
(7,141,696)
|
|
(6,563,936)
|
|
(251,351,388)
|
|
(20,904,510)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that may be
reclassified
subsequently to net
loss
|
|
|
|
|
|
|
Foreign currency
translation gain (loss)
|
217,971
|
(93,871)
|
|
752,499
|
|
(375,481)
|
|
|
|
|
|
|
|
|
Total
comprehensive loss
|
(6,923,725)
|
|
(6,657,807)
|
|
(250,598,889)
|
|
(21,279,991)
|
|
|
|
|
|
|
|
|
Loss per share -
basic and diluted
|
(0.11)
|
|
(0.59)
|
|
(4.48)
|
|
(1.87)
|
DIALOGUE HEALTH
TECHNOLOGIES INC.
|
|
CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, 2021 AND DECEMBER 31, 2020
|
|
|
December
31,
|
|
December
31,
|
|
2021
|
|
2020
|
|
$
|
|
$
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
104,296,162
|
|
42,067,100
|
Trade and other
receivables
|
13,659,453
|
|
11,358,615
|
Asset held for
sale
|
—
|
|
909,541
|
Prepaid
expenses
|
1,811,159
|
|
745,673
|
|
119,766,774
|
|
55,080,929
|
|
|
|
|
Property and
equipment
|
1,136,558
|
|
1,019,406
|
Right-of-use
assets
|
1,567,985
|
|
1,687,434
|
Intangible
assets
|
5,818,624
|
|
5,472,196
|
Goodwill
|
6,962,820
|
|
3,114,927
|
|
135,252,761
|
|
66,374,892
|
Liabilities
|
|
|
|
Current
liabilities
|
|
|
|
Trade payable and
accrued liabilities
|
9,533,670
|
|
7,489,083
|
Unearned
revenue
|
67,759
|
|
476,619
|
Liability related to
asset held for sale
|
—
|
|
430,110
|
Current portion of
contingent consideration payable
|
718,133
|
|
1,379,501
|
Current portion of
long-term debt
|
400,020
|
|
398,020
|
Current portion of
lease liabilities
|
540,894
|
|
524,618
|
|
11,260,476
|
|
10,697,951
|
|
|
|
|
Non-current portion
of lease liabilities
|
911,337
|
|
1,086,720
|
Non-current portion
of long-term debt
|
1,074,053
|
|
1,459,407
|
Non-current portion
of contingent consideration payable
|
1,299,907
|
|
523,499
|
Redeemable Class B
preferred shares
|
—
|
|
82,805,661
|
Deferred income tax
liability
|
766,263
|
|
976,890
|
Conversion option on
redeemable Class B preferred shares
|
—
|
|
92,755
|
|
15,312,036
|
|
97,642,883
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Shareholders'
equity (deficit)
|
|
|
|
Share
capital
|
458,961,698
|
|
18,890,120
|
Equity
reserve
|
3,513,934
|
|
1,777,907
|
Cumulative
translation adjustment
|
347,336
|
|
(405,163)
|
Deficit
|
(342,882,243)
|
|
(51,530,855)
|
|
119,940,725
|
|
(31,267,991)
|
|
135,252,761
|
|
66,374,892
|
DIALOGUE HEALTH
TECHNOLOGIES INC.
|
|
CONSOLIDATED
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
|
|
|
Year
ended
December
31,
|
|
2021
|
|
2020
|
|
$
|
|
$
|
Operating
activities
|
|
|
|
Net loss
|
(251,351,388)
|
|
(20,904,510)
|
Items not affecting
cash
|
|
|
|
Decrease in contingent
consideration- Optima
|
(358,000)
|
|
—
|
Increase in contingent
consideration- EHH
|
192,688
|
|
—
|
Write-off of leasehold
improvements
|
—
|
|
157,715
|
Income tax
recovery
|
(392,698)
|
|
—
|
Change in conversion
feature on preferred shares
|
225,416,590
|
|
—
|
Depreciation of
property and equipment
|
519,122
|
|
675,830
|
Amortization of
right-of-use assets
|
599,846
|
|
504,956
|
Net financing (income)
expenses
|
(362,138)
|
|
713,897
|
Amortization of
intangible assets
|
1,502,339
|
|
739,873
|
Share-based
payments
|
2,060,636
|
|
966,206
|
|
(22,173,003)
|
|
(17,146,033)
|
Net changes in
non-cash operating working capital items
|
|
|
|
Trade and other
receivables
|
(2,300,838)
|
|
(7,112,797)
|
Prepaid
expenses
|
(1,065,486)
|
|
(151,766)
|
Trade and other
payables
|
2,044,587
|
|
5,615,788
|
Unearned
revenue
|
(408,860)
|
|
447,369
|
Interest
paid
|
(128,265)
|
|
(64,615)
|
Interest
income
|
752,868
|
|
—
|
|
(23,278,997)
|
|
(18,412,054)
|
|
|
|
|
Investing
activities
|
|
|
|
Purchase of property
and equipment
|
(651,026)
|
|
(780,767)
|
Purchase of intangible
assets
|
(86,984)
|
|
(161,140)
|
Sale of asset held for
sale
|
909,541
|
|
—
|
Acquisition of
Optima
|
—
|
|
(5,000,000)
|
Acquisition of
Botfront
|
(291,800)
|
|
—
|
Acquisition of e-Hub
Health Pty Ltd., net of cash acquired
|
(3,137,531)
|
|
—
|
Payment of Optima
Global Health Inc. Earnout
|
(1,500,000)
|
|
—
|
Payment of Botfront
Earnout
|
(198,500)
|
|
—
|
|
(4,956,300)
|
|
(5,941,907)
|
Financing
activities
|
|
|
|
Issuance of
shares
|
100,008,000
|
|
43,235,247
|
Share issue
costs
|
(9,371,189)
|
|
—
|
Options
exercised
|
603,995
|
|
—
|
Repayment of liability
related to asset held for sale
|
(430,110)
|
|
—
|
Repayment of long-term
debt
|
(400,020)
|
|
(133,330)
|
Repayment of lease
liabilities
|
(698,816)
|
|
(417,271)
|
Transaction
costs
|
—
|
|
(500,000)
|
|
89,711,860
|
|
42,184,646
|
Effect of foreign
currency translation
|
752,499
|
|
(375,481)
|
Net increase in cash
and cash equivalents
|
62,229,062
|
|
17,455,205
|
Cash and cash
equivalents, beginning of the year
|
42,067,100
|
|
24,611,895
|
Cash and cash
equivalents, end of the year
|
104,296,162
|
|
42,067,100
|
SOURCE Dialogue Health Technologies Inc.