Catasys Reports Third Quarter 2015 Financial Results

Press Releases |

Total Revenue Grew 45% Year-over-Year; Deferred Revenue Grew 82% Quarter-over-Quarter

Significant Growth in Enrollment, up 230% from the Third Quarter of the Prior Year

LOS ANGELES, Nov. 16, 2015 -- Catasys, Inc. ($CATS), a provider of proprietary data, predictive analytics modeling based behavioral health management services for health plans, today reported financial results for the third quarter ended September 30, 2015.

"We have made significant advancements rolling out and expanding our network over the past few quarters, which increased revenue by 45% for the three months ended September 30, 2015 from the same period in the prior year and deferred revenue by 82% from June 30, 2015 to September 30, 2015.  We believe that this is just the beginning of what is expected to be a significant period of growth for the Company as we increase the number of Commercial Equivalent Lives ("CELs") under contract and enroll members into our OnTrak™ program from newly launched programs over the next few quarters," said Rick Anderson, President and COO.

Third Quarter 2015 Financial Highlights

  • Enrollment increased by 230% and 128% for the three and the nine month periods ended September 30, 2015, respectively.
  • Total revenues were $538,000, an increase of 45% compared to $370,000 in the third quarter of 2014. This increase was primarily driven by an expansion of health plan populations covered under our program and increasing enrollment in OnTrak programs.
  • Deferred revenue was $1.6 million at September 30, 2015, an increase of $701,000, or 82% over the amount at June 30, 2015. When fees are received in advance, deferred revenue is recognized over the period the member is enrolled. Any fees subject to performance guarantees are deferred until such time as those performance standards are met; generally calculated annually. Catasys has historically been able to record its deferred revenue as actual revenue during the course of the business cycle, except for limited cases where members terminated from the program early.
  • Net loss was $(7.5) million, or $(0.16) per basic and diluted share in the third quarter of 2015, compared to a net loss of $(210,000), or $(0.01) per basic and diluted share in the third quarter of 2014.
  • Total operating expenses were $2.7 million in the third quarter of 2015, an increase of 38% compared to $2.0 million in the third quarter of 2014. This increase was primarily due to a $2.0 million increase in general and administrative expenses and to the higher cost of healthcare services based on increasing enrollment and non-cash general and administrative expenses.
  • General and administrative expenses were $2.0 million in the third quarter of 2015, an increase of 23% compared to $1.6 million in the third quarter of 2014. This increase was primarily due to non-cash compensation expense for stock option grants to the members of the board of directors.
  • Cash and cash equivalents were $225,000 as of September 30, 2015.

About Catasys, Inc.

Catasys, Inc. provides big data based analytics and predictive modeling driven behavioral healthcare services to health plans and their members through its OnTrak program. Catasys' OnTrak program—contracted with a growing number of health insurers—is designed to improve member health and, at the same time, lower costs to the insurer for underserved populations where behavioral health conditions cause or exacerbate co-existing medical conditions. The program utilizes proprietary analytics and proprietary enrollment, engagement and behavioral modification capabilities to assist members who otherwise do not seek care through a patient-centric treatment that integrates evidence-based medical and psychosocial interventions along with care coaching in a 52-week outpatient program. OnTrak is currently improving member health and, at the same time, is demonstrating reduced inpatient and emergency room utilization, driving a more than 50 percent reduction in total health insurers' costs for enrolled members. Catasys currently operates OnTrak in Florida, Illinois, Kansas, Kentucky, Louisiana, Massachusetts, New Jersey, Oklahoma, West Virginia and Wisconsin. For further information, please visit catasys.com.

Forward-Looking Statements

Except for statements of historical fact, the matters discussed in this press release are forward-looking and made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect numerous assumptions and involve a variety of risks and uncertainties, many of which are beyond our control that may cause actual results to differ materially from stated expectations. These risk factors include, among others, changes in regulations or issuance of new regulations or interpretations, limited operating history, our inability to execute our business plan, increase our revenue and achieve profitability, lower than anticipated eligible members under our contracts, our inability to recognize revenue, lack of outcomes and statistically significant formal research studies, difficulty enrolling new and maintain existing members in our programs, the risk that treatment programs might not be effective, difficulty in developing, exploiting and protecting proprietary technologies, intense competition and substantial regulation in the health care industry, the risks associated with the adequacy of our existing cash resources and our ability to continue as a going concern, our ability to raise additional capital when needed and our liquidity. You are urged to consider statements that include the words "may," "will," "would," "could," "should," "believes," "estimates," "projects," "potential," "expects," "plan," "anticipates," "intends," "continues," "forecast," "designed," "goal," or the negative of those words other comparable words to be uncertain and forward-looking. For a further list and description of the risks and uncertainties we face, please refer to our most recent Securities and Exchange Commission filings which are available on its website at http://www.sec.gov. Such forward-looking statements are current only as of the date they are made, and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

 

CATASYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(unaudited)

                   
     

Three Months Ended

 

Nine Months Ended

(In thousands, except per share amounts)

September 30,

 

September 30,

     

2015

 

2014

 

2015

 

2014

Revenues

             
 

Healthcare services revenues

$            538

 

$            370

 

$         1,443

 

$            881

                   

Operating expenses

             
 

Cost of healthcare services

720

 

346

 

1,655

 

878

 

General and administrative

1,968

 

1,596

 

7,124

 

4,642

 

Depreciation and amortization

30

 

30

 

94

 

82

   

Total operating expenses

2,718

 

1,972

 

8,873

 

5,602

                   

Loss from operations

(2,180)

 

(1,602)

 

(7,430)

 

(4,721)

                   

Other Income

20

 

-

 

41

 

1,194

Interest expense

(1,209)

 

(2)

 

(2,321)

 

(2,776)

Loss on disposal of IP

(88)

 

-

 

(88)

 

-

Loss on exchange of warrants

-

 

-

 

(4,410)

 

-

Change in fair value of warrant liability

1,007

 

1,397

 

10,915

 

(18,995)

Change in fair value of derivative liability

(5,027)

 

-

 

(5,027)

 

-

Loss from continuing operations before provision for income taxes

(7,477)

 

(207)

 

(8,320)

 

(25,298)

Provision for income taxes

3

 

3

 

7

 

7

Loss from continuing operations  

$       (7,480)

 

$          (210)

 

$       (8,327)

 

$     (25,305)

                   

Loss from discontinued operations, net of income taxes

$                -

 

$                -

 

$                -

 

$          (213)

                   

Net Loss

$       (7,480)

 

$          (210)

 

$       (8,327)

 

$     (25,518)

                   
                   

Basic and diluted net loss from continuing operations per share:

($0.16)

 

($0.01)

 

($0.23)

 

($1.17)

                   
 

Basic weighted number of shares outstanding

47,638

 

23,513

 

36,181

 

21,569

                   

Basic and diluted net loss from discontinued operations per share:

$0.00

 

$0.00

 

$0.00

 

($0.01)

                   
 

Diluted weighted number of shares outstanding

47,638

 

23,513

 

36,181

 

21,569

                   

 

 

CATASYS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

       
     

September 30,

   

(In thousands, except for number of shares)

2015

 

December 31,

     

(unaudited)

 

2014

ASSETS

     

Current assets

     
 

Cash and cash equivalents

$                   225

 

$                   708

 

Receivables, net of allowance for doubtful accounts of $9 and $0, respectively

     
 

418

 

189

 

Receivables from related party

-

 

300

 

Prepaids and other current assets

599

 

313

   

Total current assets

1,242

 

1,510

Long-term assets

     
 

Property and equipment, net of accumulated depreciation of $1,827 and $2,002, respectively

     
 

297

 

354

 

Intangible assets, net of accumulated amortization of $0 and $418, respectively

     
 

-

 

101

 

Deposits and other assets

387

 

387

Total Assets

$                1,926

 

$                2,352

           

LIABILITIES AND STOCKHOLDERS' DEFICIT

     

Current liabilities

     
 

Accounts payable

$                   693

 

$                   341

 

Accrued compensation and benefits

1,514

 

1,392

 

Deferred revenue

1,554

 

354

 

Other accrued liabilities

715

 

614

 

Short term convertible debt, related party, net of discount $1,608 and $0, respectively

     
 

2,008

 

-

 

Short term derivative liability

6,046

 

-

 

Warrant liabilities

-

 

259

   

Total current liabilities

12,530

 

2,960

Long-term liabilities

     
 

Deferred rent and other long-term liabilities

216

 

267

 

Capital leases

17

 

23

 

Warrant liabilities

1,258

 

40,326

Total Liabilities

14,021

 

43,576

           

Stockholders' deficit

     
 

Preferred stock, $0.0001 par value; 50,000,000 shares authorized; no shares issued and outstanding

     
 

-

 

-

 

Common stock, $0.0001 par value; 500,000,000 shares authorized; 48,141,094 and 25,244,485 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively

     
       
 

5

 

3

 

Additional paid-in-capital

250,722

 

213,333

 

Accumulated deficit

(262,822)

 

(254,560)

Total Stockholders' Deficit

(12,095)

 

(41,224)

Total Liabilities and Stockholders' Deficit

$                1,926

 

$                2,352

 

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