UPHEALTH ANNOUNCES SECOND QUARTER 2022 FINANCIAL RESULTS

Second Quarter Income of $43.7 million, a 21% enhance on a Sequential Foundation

Gross Margin Expanded to 51%, in comparison with 43% on a Sequential Foundation

Practically 50% of Transformation Initiatives Accomplished To-Date 

Subsequent to Quarter Finish, Firm Underneath New Management of CEO Samuel J. Meckey 

Introduced $67.5M Convertible Debt Financing, Additional Extending Firm’s Maturity Profile 

DELRAY BEACH, Fla., Aug. 15, 2022 /PRNewswire/ — UpHealth, Inc. (“UpHealth” or the “Firm”) (NYSE: UPH), a worldwide digital well being firm delivering know-how platforms, infrastructure, and companies to modernize care supply and well being administration, at present introduced monetary outcomes for the second quarter ended June 30, 2022.

UpHealth CEO Sam Meckey stated, “I joined UpHealth as a result of the Firm’s belongings are uniquely located throughout the healthcare ecosystem, to unravel among the most urgent issues in healthcare at present. The alternatives for UpHealth to create worth for our purchasers are vital and I’m desperate to contribute my expertise and data in healthcare, to assist drive our future development.”

“I’m happy to say that with the corporate’s methods in place and the muse to help our transformation, we’re nicely positioned for long-term development. Collectively, we sit up for additional implementing our strategic imaginative and prescient, uncovering extra methods to unlock worth, and delivering for all constituents of UpHealth.”

Meckey additionally stated that he’s targeted on: “driving development throughout all verticals; delivering high-quality, predictable income streams; conserving money; and enhancing operational excellence, all whereas making a tradition that draws and retains prime expertise who focus intensely on shopper wants and shopper service.”

Second Quarter 2022 Monetary Highlights:

• Income for the second quarter of 2022 was $43.7 million, a 37% enhance in comparison with GAAP income for the second quarter of 2021 of $31.9 million and an 11% enhance in comparison with professional forma income for the second quarter of 2021 of $39.2 million.  Gross margin expanded to 51%, up from GAAP and professional forma gross margin within the second quarter of 2021 of 36%. 
• Income and gross margin by phase for the second quarter of 2022 had been:
• Built-in Care Administration generated $7.8 million of income (18% of whole income) with a gross margin of 88%.
• Digital Care Infrastructure generated $16.8 million of income (39% of whole income) with a gross margin of 49%.
• Providers generated $19.0 million of income (44% of whole income) with a gross margin of 38%.
• Working loss for the second quarter of 2022 was $(10.0) million, a 72% enchancment in comparison with working loss within the second quarter of 2021 of $(35.5) million.
• Adjusted EBITDA for the second quarter of 2022 was $4.0 million, in comparison with GAAP and professional forma Adjusted EBITDA for the second quarter of 2021 of $2.2 million and $2.4 million, respectively.

Please check with the dialogue and tables beneath “Non-GAAP Monetary Info.”

Yr-to-Date Second Quarter 2022 Monetary Highlights:

• Yr-to-date income for the second quarter of 2022 was $79.6 million, a 78% enhance in comparison with year-to-date GAAP income for the second quarter of 2021 of $44.7 million and a 14% enhance in comparison with year-to-date professional forma income for the second quarter of 2021 of $69.8 million.  Yr-to-date gross margin for the second quarter of 2022 expanded to 47%, up from year-to-date GAAP and professional forma gross margin for the second quarter of 2021 of 41% and 40%, respectively. 
• Yr-to-date income and gross margin by phase for the second quarter of 2022 had been:
• Built-in Care Administration generated $10.4 million of income (13% of whole income) with a gross margin of 82%.
• Digital Care Infrastructure generated $32.4 million of income (41% of whole income) with a gross margin of 48%.
• Providers generated $36.8 million of income (46% of whole income) with a gross margin of 37%.
• Yr-to-date working loss for the second quarter of 2022 was $(28.0) million, a 27% enchancment in comparison with year-to-date working loss for the second quarter of 2021 of $(38.3) million.
• Yr-to-date Adjusted EBITDA for the second quarter of 2022 was $2.6 million, in comparison with year-to-date GAAP and professional forma Adjusted EBITDA for the second quarter of 2021 of $2.9 million and $5.4 million, respectively.

Please check with the dialogue and tables beneath “Non-GAAP Monetary Info.”

Vital Second Quarter Enterprise Highlights:

• 240 of the over 600 particular transformation milestones accomplished as of quarter finish, and an expectation to be at roughly 80% completion by the top of the third quarter.
• Martti™ at the moment helps 224,000 encounters per 30 days and over 34,000 video endpoints at over 2,300 healthcare areas within the U.S. In the course of the second quarter, the Firm closed 46 new Martti™ contracts, with over 90 implementations in healthcare amenities nationwide.
• Executed a contract extension and enlargement with the L.A. County Division of Psychological Well being, increasing UpHealth’s work for an extra 12 months, contributing $7.9 million to revenues.
• The Firm recorded its largest quantity of telehealth use ever within the U.S. with over 10.6 million minutes of consultations in Q2, in comparison with 9.4 million minutes in Q1 2022. 
• HelloLyf consultations in India skilled development of over 4x with affected person consultations rising by 416K, from 115K in Q2 2021 to 531K in Q2 2022.
• Finalized a contract with a hospital system to offer an training program for his or her employees on offering well being look after minority populations with the aim of driving higher outcomes, lowering readmittance charges and lowering authorized penalties for the hospital.
• Introduced the hiring of operations veteran, Daniel Mandoli, as Govt Vice President of our Providers Enterprise. Operations optimizations are underway throughout the pharmacy enterprise.
• Subsequent to quarter finish, the unbiased administrators of UpHealth welcomed the termination of litigation that delayed the Annual Assembly of Stockholders. Because of the termination of the litigation, the Firm will maintain its Annual Assembly of Stockholders as quickly as practicable.

Convertible Debt Financing

The Firm introduced at present the sale of $67.5 million in mixture principal quantity of a brand new collection of variable charge convertible senior secured notes due December 15, 2025 (the “2025 Notes”) in a non-public placement transaction, elevating roughly $22.5 million in gross money proceeds after paying for a repurchase of $45.0 million of its 6.25% convertible senior notes due 2026. The 2025 Notes are convertible into shares of UpHealth widespread inventory at a conversion value of $1.75 per share, which represents a 101% premium over the latest closing value of UpHealth’s widespread inventory.

The 2025 Notes might be senior secured obligations of UpHealth and can accrue curiosity at a charge equal to the every day secured in a single day financing charge (“SOFR”) plus 9.0% each year, with a minimal charge of 10.5% each year, payable quarterly in arrears. The 2025 Notes will mature on December 15, 2025, until earlier repurchased, redeemed or transformed. Holders can have the fitting to transform their 2025 Notes at any time. UpHealth will settle conversions solely in shares of its widespread inventory, apart from funds of money in lieu of fractional shares.

“We’re happy to announce this milestone transaction. Importantly, the proceeds of this providing might be used to repay the excellent Vendor Notes that mature on September 1, 2022, in addition to present us with the liquidity to execute towards our development plans,” commented Martin Beck, CFO of UpHealth. “This transaction supplies us with greater than three years till any vital borrowings attain maturity, whereas sustaining the Firm’s whole leverage.”

The 2025 Notes had been provided in a non-public placement beneath Part 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and, together with the shares of widespread inventory underlying the 2025 Notes, haven’t been registered beneath the Securities Act or relevant state securities legal guidelines. Accordingly, the 2025 Notes and the underlying shares of widespread inventory is probably not provided, offered, pledged or in any other case transferred besides to a professional institutional purchaser (throughout the that means Rule 144A beneath the Securities Act) pursuant to an efficient Securities Act registration assertion or an relevant exemption from the registration necessities of the Securities Act and relevant state securities legal guidelines.

Oppenheimer & Co Inc. served as unique placement agent for the 2025 Notes.

This press launch doesn’t represent a proposal to promote or the solicitation of a proposal to purchase, nor shall there be any sale of those securities in any state or jurisdiction through which such provide, solicitation or sale could be illegal previous to the registration or qualification beneath the securities legal guidelines of any such state or jurisdiction.

Stability Sheet and Money Stream

At June 30, 2022, UpHealth reported $41.1 million of money, money equivalents and restricted money. On April 9, 2022, the Firm repaid its ahead share buy settlement in response to the phrases of the contract.

Convention Name

UpHealth administration will host a reside question-and-answer session with buyers and analysts starting at 8:30 a.m. Japanese Time at present, August 15, 2022. The decision might be accessed reside over the phone by dialing (877) 344-8082, passcode 150118, from the U.S. or Worldwide callers can dial (213) 992-4618, passcode 150118. There can even be a simultaneous, reside webcast accessible on the Investor Relations part of the Firm’s web page at https://buyers.uphealthinc.com/events-and-presentations/default.aspx or instantly right here. The webcast might be archived for roughly 30 days.

About UpHealth, Inc.                                                                                                                          

UpHealth is a worldwide digital well being firm that delivers digital-first know-how, infrastructure and companies to dramatically enhance how healthcare is delivered and managed. The UpHealth platform creates digitally enabled “care communities” that enhance entry and obtain higher affected person outcomes at decrease price, by way of digital well being options and interoperability instruments that serve sufferers wherever they’re, of their native language. UpHealth’s purchasers embrace international governments, well being plans, healthcare suppliers and community-based organizations. For extra data, please go to https://uphealthinc.com and observe us at @UpHealthInc on Twitter and UpHealth Inc on LinkedIn.

Ahead-Wanting Statements

This press launch incorporates forward-looking statements throughout the that means of U.S. federal securities legal guidelines. Such forward-looking statements embrace, however aren’t restricted to, the monetary statements of UpHealth, its product choices and developments and reception of its product by clients, statements relating to funds pursuant to the phrases of UpHealth’s debt obligations and the conversion or maturity of such debt and UpHealth’s expectations, hopes, beliefs, intentions, plans, prospects or methods relating to the longer term income and the enterprise plans of UpHealth’s administration crew. Any statements contained herein that aren’t statements of historic truth could also be deemed to be forward-looking statements. As well as, any statements that check with projections, forecasts, or different characterizations of future occasions or circumstances, together with any underlying assumptions, are forward-looking statements. The phrases “anticipate,” “consider,” “proceed,” “might,” “estimate,” “anticipate,” “intends,” “might,” “may,” “plan,” “attainable,” “potential,” “predict,” “mission,” “ought to,” “would” and comparable expressions might determine forward-looking statements, however the absence of those phrases doesn’t imply {that a} assertion just isn’t forward-looking. The forward-looking statements contained on this press launch are primarily based on sure assumptions and analyses made by the administration of UpHealth in mild of their respective expertise and notion of historic developments, present situations, and anticipated future developments and their potential results on UpHealth in addition to different components they consider are applicable within the circumstances. There might be no assurance that future developments affecting UpHealth might be these anticipated. These forward-looking statements contain quite a lot of dangers, uncertainties (a few of that are past the management of the events), or different assumptions which will trigger precise outcomes or efficiency to be materially totally different from these expressed or implied by these forward-looking statements, together with the flexibility of UpHealth to service or in any other case pay its debt obligations, the combo of companies utilized by UpHealth’s clients and such clients’ wants for these companies, market acceptance of latest service choices, the flexibility of UpHealth to broaden what it does for current clients in addition to so as to add new clients, that UpHealth can have adequate capital to function as anticipated, and the affect that the novel coronavirus and the sickness, COVID-19, that it causes, in addition to authorities responses to cope with the unfold of this sickness and the reopening of economies which were closed as a part of these responses, might have on UpHealth’s operations, the demand for UpHealth’s merchandise, international provide chains and financial exercise generally. Ought to a number of of those dangers or uncertainties materialize or ought to any of the assumptions being made show incorrect, precise outcomes might differ in materials respects from these projected in these forward-looking statements. We undertake no obligation to replace or revise any forward-looking statements, whether or not because of new data, future occasions, or in any other case, besides as could also be required beneath relevant securities legal guidelines.

Investor Relations:
Shannon Devine (MZ North America)
Managing Director
203-741-8811
[email protected]

Media Inquiries:
Kelsie Aziz (Ketchum)
Vice President, Monetary Communications
972-408-7103
[email protected]   

UPHEALTH, INC.
NON-GAAP FINANCIAL INFORMATION

Non-GAAP Monetary Info

This press launch contains monetary measures that aren’t calculated in accordance with U.S. usually accepted accounting rules (GAAP). To complement UpHealth’s condensed consolidated monetary statements offered in accordance with GAAP, UpHealth presents buyers with non-GAAP monetary measures, together with professional forma income, professional forma gross margin and adjusted EBITDA.

• Professional forma income consists of GAAP income and income from UpHealth’s subsidiaries previous to their acquisition.
• Professional forma gross margin consists of GAAP gross margin and gross margin from UpHealth’s subsidiaries previous to their acquisition.
• Adjusted EBITDA consists of web revenue (loss) attributable to UpHealth, Inc., excluding depreciation and amortization; stock-based compensation; lease abandonment bills; goodwill/intangible asset impairment; acquisition, integration, and transformation prices; different revenue (expense); revenue tax profit (expense); revenue (loss) from fairness technique funding; web revenue (loss) attributable to noncontrolling pursuits; and different non-recurring expenses to GAAP web revenue (loss) attributable to UpHealth, Inc. Different non-recurring expenses to GAAP web revenue (loss) attributable to UpHealth, Inc. might embrace transaction bills in reference to capital elevating transactions (whether or not debt, fairness or equity-linked) and acquisitions, whether or not or not consummated, buy value changes, the cumulative impact of a change in accounting rules, or different bills decided to be non-recurring.

UpHealth believes that the presentation of those non-GAAP monetary measures supplies essential supplemental data to administration and buyers relating to monetary and enterprise developments regarding UpHealth’s monetary situation and outcomes of operations. Administration believes that the gadgets described above present an extra measure of UpHealth’s working outcomes and facilitates comparisons of UpHealth’s core working efficiency towards prior durations and enterprise mannequin targets. This data is offered to buyers with a purpose to facilitate extra analyses of previous, current, and future working efficiency and as a supplemental means to guage UpHealth’s ongoing operations. UpHealth believes that these non-GAAP monetary measures are helpful to buyers of their evaluation of UpHealth’s working efficiency.

Professional forma income, professional forma gross margin and adjusted EBITDA aren’t calculated in accordance with GAAP, and ought to be thought-about supplemental to, and never as an alternative to, or superior to, monetary measures calculated in accordance with GAAP. You shouldn’t contemplate these measures in isolation or as an alternative to evaluation of UpHealth’s outcomes as reported beneath GAAP. UpHealth compensates for these limitations by prominently disclosing GAAP monetary measures and offering buyers with reconciliations from UpHealth’s GAAP working outcomes to the non-GAAP monetary measures for the related durations.

The accompanying tables present extra particulars on the GAAP monetary measures which are most instantly corresponding to the non-GAAP monetary measures described above and the associated reconciliations between these monetary measures.

UPHEALTH, INC.
SEGMENT INFORMATION AND RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (1)
(In 1000’s, unaudited)

SOURCE UpHealth, Inc.