Full Press Release Details
Group Reports Record Third Quarter 2020 Financial Results
Increase 174% to Third Quarter Record of $6.3 Million; Continues Nationwide Platform Expansion
FL, October 26, 2020 -- Trxade Group, Inc. (NASDAQ: MEDS), an integrated drug procurement, delivery and healthcare platform,
has provided its financial results for the third quarter ended September 30, 2020.
Financial Highlights
| $ in millions | Q3 2020 | Q3 2019 | % Increase (Decrease) | |||||||||
| Revenues | $ | 6.3 | $ | 2.3 | 174 | % | ||||||
| Gross Profit | $ | 1.9 | $ | 1.3 | 47 | % | ||||||
| Gross Margin | 30.5 | % | 56.7 | % | (26.2 | )% | ||||||
| Net Income | $ | 0.14 | $ | 0.03 | 402 | % | ||||||
| Adjusted EBITDA* | $ | 0.67 | $ | 0.27 | 150 | % |
Quarter 2020 and Subsequent Operational Highlights
| Trxade continued to expand its platform nationwide, adding 144 new independent pharmacies in Q3 2020, bringing the total registered pharmacy members to around 11,800. | ||
| Launched Bonum+, a B2B platform under the Company's telehealth subsidiary Bonum Health, which bundles telehealth, a COVID-19 risk assessment tool and a Personal Protective Equipment (PPE) purchasing tool through a secure mobile dashboard for corporate clients. | ||
| Announced prescription savings partnership with SingleCare, a free prescription savings service, to supplement Bonum Health's enterprise telehealth solutions with prescription discounts offered to national, regional and local pharmacies to promote the benefit to uninsured patients and underserved communities. |
third quarter was highlighted by our impressive financial results, growing revenues 174% year-over-year, due to both robust PPE
sales and ever more pharmacies joining the Trxade marketplace platform," said Suren Ajjarapu, Chairman and Chief Executive
Officer. "The COVID-19 pandemic has only underscored the importance of an integrated platform like ours, which enables independent
pharmacies to remain competitive and profitable in a changing drug procurement marketplace."
Trxade marketplace platform at the core of our business has
continued to grow, with 144 new pharmacies added in the quarter - bringing our total to around 11,800," added Mr.
telehealth subsidiary, Bonum Health, continues to expand the
breadth of its service offerings, providing not only telehealth solutions, allowing individuals to speak with a doctor and obtain
prescriptions remotely - but further allowing them to purchase prescriptions at a discount through partnerships with companies
like SingleCare, and identify a pharmacy near them for pickup. We have concurrently expanded our offerings to employers, who can
use our Bonum+ platform to manage COVID-19 risk through a comprehensive interface, helping enable employees to safely return to
are a nimble organization and remain well-positioned to address emerging opportunities in the industry through our various business
units, having created an unrivaled drug procurement marketplace platform for independent pharmacies, as well as a comprehensive
healthcare solution for consumers centered around the independent pharmacy ecosystem. I look forward to our continued progress
in the months ahead - creating sustainable, long-term value for our stockholders," concluded Mr. Ajjarapu.
Quarter 2020 Financial Summary
| Revenues for the third quarter of 2020 increased 174% to $6.3 million, compared to revenue of $2.3 million in the same quarter last year. The increase in revenue was primarily due to strong Personal Protective Equipment sales in the third quarter, driven by the COVID-19 pandemic. | ||
| Gross profit in the third quarter of 2020 increased 47% to $1.9 million, or 30.5% of revenues, compared to gross profit of $1.3 million, or 56.7% of revenues, in the same quarter last year. The increase in gross profit was primarily attributable to high-volume, lower-margin sales of Personal Protective Equipment in our Integra Pharma unit. | ||
| Operating expenses in the third quarter of 2020 were $1.8 million, compared to $1.1 million in the same quarter last year. This increase is primarily due to non-cash stock-based compensation expenses, IT Expenditures and marketing expenses. | ||
| Net income in the third quarter of 2020 was $0.14 million, or $0.02 per basic and diluted share outstanding, compared to net income of $0.03 million, or $0.00 per basic and diluted share outstanding, in the same quarter last year. | ||
| Adjusted EBITDA*, a non-GAAP financial measure, increased 150% to $0.67 million, compared to $0.27 million in the same quarter last year. | ||
| Cash and cash equivalents were $6.6 million as of September 30, 2020, compared with $4.2 million as of June 30, 2020. |
information regarding the Company's Q3 2020 results of operations can be found in the Quarterly Report on Form 10-Q, which
the Company plans to file on October 26, 2020 with the Securities and Exchange Commission.
will host a conference call today, October 26, 2020 at 5:00 p.m. EDT to discuss Trxade Group's 2020 third quarter financial
results. The call will conclude with a Q&A from participants. To participate, please use the following information:
2020 Conference Call and Webcast
Monday, October 26, 2020
Time: 5:00 p.m. Eastern Daylight time
U.S. Dial-in: 1-877-425-9470
International Dial-in: 1-201-389-0878
Conference ID: 13711397
dial in at least 10 minutes before the start of the call to ensure timely participation.
A playback of the call will be available through November 26, 2020.
To listen, call 1-844-512-2921 within the United States or 1-412-317-6671 when calling internationally. Please use the replay pin
number 13711397. A webcast will also be available for 30 days on the IR section of the Trxade Group website (at www.trxadegroup.com,
under "NASDAQ:MEDS") or by clicking the webcast link above.
in Tampa, Florida, Trxade Group, Inc. (Nasdaq: MEDS) is an integrated drug procurement, delivery and healthcare platform that
fosters price transparency, thereby improving profit margins for both buyers and sellers of pharmaceuticals. Trxade Group operates
across all 50 states with the central mission of making healthcare services affordable and accessible. Founded in 2010, Trxade
Group is comprised of three synergistic operating platforms; (1) the Trxade B2B trading platform with around 11,800 registered
pharmacies, (2) Integra Pharma Solutions, Trxade Group's virtual wholesale division and (3) the Bonum Health platform offering
affordable telehealth services. For additional information, please visit us at www.trxade.com and www.bonumhealth.com.
of Non-GAAP Financial Information
earnings release discusses EBITDA and Adjusted EBITDA. These measurements are not recognized in accordance with generally accepted
accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. EBITDA represents net
income before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before stock-based compensation
expense and gain (loss) in equity investment. EBITDA and Adjusted EBITDA are presented because we believe they provide additional
useful information to investors due to the various noncash items during the period. EBITDA and Adjusted EBITDA have limitations
as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our operating results as
reported under GAAP. Some of these limitations are: EBITDA and Adjusted EBITDA do not reflect cash expenditures, future requirements
for capital expenditures, or contractual commitments; EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements
for, working capital needs; and EBITDA and Adjusted EBITDA do not reflect the significant interest expense, or the cash requirements
necessary to service interest or principal payments, on debt or cash income tax payments. Although depreciation and amortization
are noncash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted
EBITDA do not reflect any cash requirements for such replacements. Additionally, other companies in our industry may calculate
EBITDA and Adjusted EBITDA differently than Trxade Group, Inc. does, limiting its usefulness as a comparative measure. See also
"Reconciliation of Net Income attributable to Trxade Group, Inc., to Earnings before Interest, Taxes, Depreciation and Amortization
(EBITDA) and Adjusted EBITDA", below.
press release may contain forward-looking statements, including information about management's view of Trxade's future
expectations, plans and prospects, within the safe harbor provisions under The Private Securities Litigation Reform Act of 1995
(the "Act"). In particular, when used in the preceding discussion, the words "may," "could,"
"expect," "intend," "plan," "seek," "anticipate," "believe,"
"estimate," "predict," "potential," "continue," "likely," "would"
and variations of these terms and similar expressions, or the negative of these terms or similar expressions are intended to identify
forward-looking statements within the meaning of the Act, and are subject to the safe harbor created by the Act. Any statements
made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements.
These statements involve known and unknown risks, uncertainties and other factors, which may cause the results of Trxade, its
divisions and concepts to be materially different than those expressed or implied in such statements. These risk factors and others
are included from time to time in filings made by Trxade with the Securities and Exchange Commission, including, but not limited
to, in the "Risk Factors" sections in its Form 10-Ks and Form 10-Qs and in its Form 8-Ks, which we have filed, and
file from time to time, with the U.S. Securities and Exchange Commission. These reports are available at www.sec.gov. Other
unknown or unpredictable factors also could have material adverse effects on Trxade's future results and/or could cause
our actual results and financial condition to differ materially from those indicated in the forward-looking statements. The forward-looking
statements included in this press release are made only as of the date hereof. Trxade cannot guarantee future results, levels
of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements.
We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information
or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent
required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make
additional updates with respect to those or other forward-looking statements.
Senior Vice President
MZ Group - MZ North America
30, 2020 and December 31, 2019
| September 30, 2020 | December 31, 2019 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 6,647,763 | $ | 2,871,694 | ||||
| Accounts Receivable, net | 1,034,482 | 792,050 | ||||||
| Inventory | 1,647,088 | 56,761 | ||||||
| Prepaid Assets | 232,671 | 82,452 | ||||||
| Deposits for Inventory purchases | 1,081,250 | - | ||||||
| Total Current Assets | 10,643,254 | 3,802,957 | ||||||
| Property Plant and Equipment, Net | 150,147 | 174,987 | ||||||
| Other Assets | ||||||||
| Deposits | 21,636 | 21,636 | ||||||
| Deferred Offering Costs | - | 88,231 | ||||||
| Right-of-use leased assets | 313,000 | 757,710 | ||||||
| Goodwill | 725,973 | 725,973 | ||||||
| Total Assets | $ | 11,854,010 | $ | 5,571,494 | ||||
| Liabilities and Shareholders' Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts Payable | $ | 191,597 | $ | 334,614 | ||||
| Accrued Liabilities | 286,145 | 98,852 | ||||||
| Current Portion Lease Liabilities | 57,155 | 87,350 | ||||||
| Total Current Liabilities | 534,897 | 520,816 | ||||||
| Long Term Liabilities | ||||||||
| Notes Payable - Related Parties | 225,000 | 225,000 | ||||||
| Other Long-term Liabilities - Leases | 267,024 | 685,461 | ||||||
| Total Liabilities | 1,026,921 | 1,431,277 | ||||||
| Shareholders' Equity | ||||||||
| Series A Preferred Stock, $0.00001 par value; 10,000,000 shares authorized; none issued and outstanding as of September 30, 2020 and December 31, 2019, respectfully | - | - | ||||||
| Common Stock, $0.00001 par value; 100,000,000 shares authorized; 8,070,671 and 6,539,415 shares issued and outstanding, as of September 30, 2020 and December 31, 2019, respectively | 81 | 65 | ||||||
| Additional Paid-in Capital | 19,446,404 | 12,535,655 | ||||||
| Retained Deficit | (8,619,396 | ) | (8,395,503 | ) | ||||
| Total Shareholders' Equity | 10,827,089 | 4,140,217 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 11,854,010 | $ | 5,571,494 |
Statements of Operations
the Three and Nine Months Ended September 30, 2020 and 2019
| Three months ended | Nine months ended | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Revenues | $ | 6,332,269 | $ | 2,311,426 | $ | 15,128,226 | $ | 5,740,361 | ||||||||
| Cost of Sales | 4,402,967 | 1,000,917 | 9,554,016 | 2,119,894 | ||||||||||||
| Gross Profit | 1,929,302 | 1,310,509 | 5,574,210 | 3,620,467 | ||||||||||||
| Operating Expenses | ||||||||||||||||
| General and Administrative | 1,783,481 | 1,132,656 | 5,775,439 | 3,138,150 | ||||||||||||
| Operating Income (Loss) | 145,821 | 177,853 | (201,229 | ) | 482,317 | |||||||||||
| Other Income | - | 25,275 | - | 25,275 | ||||||||||||
| Investment Loss | - | (162,178 | ) | - | (250,000 | ) | ||||||||||
| Interest Expense | (7,430 | ) | (13,385 | ) | (22,664 | ) | (46,817 | ) | ||||||||
| Net Income (Loss) | $ | 138,391 | $ | 27,565 | $ | (223,893 | ) | $ | 210,775 | |||||||
| Net Income (Loss) per Common Share - Basic: | $ | 0.02 | $ | 0.00 | $ | (0.03 | ) | $ | 0.04 | |||||||
| Net Income (Loss) per Common Share - Diluted: | $ | 0.02 | $ | 0.00 | $ | (0.03 | ) | $ | 0.03 | |||||||
| Weighted average Common Shares Outstanding - Basic | 8,063,043 | 5,748,329 | 7,572,954 | 5,728,421 | ||||||||||||
| Weighted average Common Shares Outstanding - Diluted | 8,215,418 | 6,047,748 | 7,725,329 | 6,027,840 |
Statements of Cash Flows
the Nine months ended September 30, 2020 and 2019
| 2020 | 2019 | |||||||
| Operating Activities: | ||||||||
| Net Income (Loss) | $ | (223,893 | ) | $ | 210,775 | |||
| Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Depreciation Expense | 3,750 | 3,750 | ||||||
| Options Expense | 372,900 | 141,594 | ||||||
| Warrant Expense | 149,158 | 26,363 | ||||||
| Common Stock Issued for Services | 1,178,113 | - | ||||||
| Bad Debt Expense | 35,539 | 6,084 | ||||||
| Investment Loss | - | 250,000 | ||||||
| Inventory Write Down | 137,155 | - | ||||||
| Amortization of Right-of-Use Asset | 60,600 | 66,598 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts Receivable | (277,971 | ) | (282,746 | ) | ||||
| Prepaid Assets and Other Current Assets | (150,219 | ) | (100,100 | ) | ||||
| Inventory | (1,727,482 | ) | 16,650 | |||||
| Deposits for Inventory Purchases | (1,081,250 | ) | - | |||||
| Lease Liability | (64,522 | ) | (55,102 | ) | ||||
| Accounts Payable | (98,422 | ) | (2,557 | ) | ||||
| Accrued Liabilities and Other Liabilities | 187,293 | 43,256 | ||||||
| Net Cash (used in) provided by operating activities | (1,499,251 | ) | 324,565 | |||||
| Investing Activities: | ||||||||
| Purchase of Fixed Assets | (23,505 | ) | - | |||||
| Purchase of Equity Method Investment | - | (250,000 | ) | |||||
| Net Cash (used in) investing activities | (23,505 | ) | (250,000 | ) | ||||
| Financing Activities: | ||||||||
| Repayments of Short-Term Convertible Debt - Related Parties | - | (40,000 | ) | |||||
| Payment of Stock Issuance Costs | (732,355 | ) | - | |||||
| Proceeds from Exercise of Warrants | 36,255 | 166 | ||||||
| Proceeds from Exercise of Stock Options | 501 | - | ||||||
| Proceeds from Issuance of Common Stock | 5,994,424 | 2,455,000 | ||||||
| Net Cash provided by financing activities | 5,298,825 | 2,415,166 | ||||||
| Net increase in Cash | 3,776,069 | 2,489,731 | ||||||
| Cash at Beginning of the Period | 2,871,694 | 869,557 | ||||||
| Cash at End of the Period | $ | 6,647,763 | $ | 3,359,288 | ||||
| Supplemental Cash Flow Information | ||||||||
| Cash Paid for Interest | $ | 5,789 | $ | 40,705 | ||||
| Cash Paid for Income Taxes | $ | - | $ | - | ||||
| Non-Cash Transactions | ||||||||
| Common Stock Issued for Conversion of Note and Accrued Interest | $ | - | $ | 211,983 | ||||
| ROU Assets and Operating Lease Obligations recognized | $ | - | $ | 847,441 | ||||
| Remeasurement of ROU Assets and Lease Liability for Nonrenewal of Lease | $ | 384,110 | $ | - |
of Net Income (Loss) attributable to Trxade Group, Inc., to Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA)
and Adjusted EBITDA*
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net Income (loss) attributable to Trxade Group, Inc. | $ | 138,391 | $ | 27,565 | $ | (223,893 | ) | $ | 210,775 | |||||||
| Add (deduct): | ||||||||||||||||
| Interest, net | 7,430 | 13,385 | 22,664 | 46,817 | ||||||||||||
| Depreciation and amortization | 1,250 | 1,250 | 3,750 | 3,750 | ||||||||||||
| EBITDA | 147,071 | 42,200 | (197,479 | ) | 261,342 | |||||||||||
| Add (deduct): | ||||||||||||||||
| Share in Equity losses on Investment | - | 162,178 | - | 250,000 | ||||||||||||
| Stock-based compensation | 524,018 | 64,011 | 1,700,170 | 167,957 | ||||||||||||
| Adjusted EBITDA * | $ | 671,089 | $ | 268,389 | $ | 1,502,691 | $ | 679,299 |
EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and
should not be viewed as an alternative to GAAP measures of performance.